solar industries india limited · solar industries india limited (siil), headquartered at nagpur,...

SOLA

R IND

USTRIES IN

DIA

LIMITED

16th Annual Report 2010-11


Expanding Horizons...

www.sapprints.com

REGD. OFFICE :11, ZADE LAYOUT, BHARAT NAGAR, NAGPUR - 440 033, (M.S.) INDIA.

PHONES : +91-712-2561000, 2560010 FAX : +91-712-2560202www.solarexplosives.com

Forward looking statementIn this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. This report and other statements - written and oral – that we periodically make contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’, and words of similar substance in connection with any discussion of future performance.

We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in assumptions. The achievements of results are subject to risks, uncertainties, and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated, or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Company Overview

Strategic Review

Board & Management Reports

Financial Statements

8

2

20

55

Contents

| Introduction 2 | Year on Year Performance Meter 6 |

| Standalone Financials 55 | Consolidated Financials 81 |

| Chairman’s Perspective 8 | Expanding Horizons 10 |

| Safety, Health, Environment and Human Resources 16 |

| Board of Directors 18 | Financial Highlights 19 |

| Notice 20 | Director’s Report 28 |

| Management Discussion and Analysis 36 |

| Corporate Governance 40 |

Board of Directors

Shri Satyanarayan Nuwal Chairman and Executive Director

Shri Kailashchandra Nuwal Executive Director

Shri Manish Nuwal Executive Director

Shri Kundan Singh Talesra Executive Director

Shri Roomie Dara Vakil Executive Director

Shri Anant Sagar Awasthi Non-Executive Independent Director

Shri Satish Chander Gupta Non-Executive Independent Director

Shri Dilip Patel Non-Executive Independent Director

Shri Ajai Nigam Non-Executive Independent Director

Shri Anand Kumar Non-Executive Independent Director

Corporate Information

Compliance OfficerShri Nilesh PanpaliyaChief Financial Officer

Company SecretaryMrs. Khushboo Pasari

Statutory AuditorsM/S Gandhi Rathi & Co.Chartered Accountants, Nagpur

BankersState Bank of IndiaBank of IndiaAxis Bank LimitedDBS BankICICI BankHSBC BankHDFC Bank Ltd.Yes BankStandard Chartered Bank

Registered and Coporate Office 11, Zade Layout, Bharat Nagar Nagpur-440033Ph: +91-712-2561000E-mail: [email protected]

Registrar and Share Transfer Agents &Depository RegistrarLink Intime India Private LimitedC-13, Pannalal Silk Mills CompoundLBS Marg, Bhandup (W), Mumbai-400078Ph: 022-25963838E-mail: [email protected]

Audit CommitteeShri Anant Sagar Awasthi Chairman

Shri Satish Chander Gupta Member

Shri Dilip Patel Member

Shri Manish Nuwal Member

Shareholders Grievance CommitteeShri Anant Sagar Awasthi Chairman

Shri Kailashchandra Nuwal Member

Shri Kundan Singh Talesra Member

Remuneration CommitteeShri Anant Sagar Awasthi Chairman

Shri Satish Chander Gupta Member

Shri Dilip Patel Member

Grievance Redressel [email protected]

16 yearsRs. 722.86 crore of turnover

The numbers are encouraging.The way ahead, exciting.

“And when we thinkwe lead, we aremost led”The famous saying sums up the motivationwe derive from our own dynamic performance.

Our products and services have successfully captured the needs and expectations of our valuable customersin India and abroad.With our willingness and a continuouszeal to exploregrowth frontiers, we are expanding the horizons of our growth...

These initiatives shall mark the beginning of yet another success story for Solar Industries India Limited and add value for its stakeholders.

by further scaling up our domestic manufacturing capacities

by developing products for defence using our infrastructure and experience

by integrating coal mining into the business as a core offering

by spreading our wings outside India

by strengthening our value added portfolio with the addition of electronic detonators

We are India’s largest manufacturers and exporters of explosives and explosive accessoriesSolar Industries India Limited (SIIL), headquartered at Nagpur, is an integrated player backed by stringent safety norms, excellent infrastructure and quality products. The Company caters to major mining, infrastructure and construction companies. Prestigious clients include Coal India Limited, Hindustan Zinc, Tata Steel, Jindal, SAIL, ACC, HCC, Gammon and L&T among others.

THE COMPANY

ALSO EXPORTS ITS

PRODUCTS TO MORE

THAN 15 COUNTRIES

ACROSS THE MIDDLE-

EAST, AFRICAN, AND

SOUTH EAST ASIAN

MARKETS.

Bulk explosivesLicensed capacities 1,86,630 MT

DetonatorsLicensed capacities 140 Mn nos

Detonating fuseLicensed capacities 75 Mn mtrs

Cartridge explosivesLicensed capacities 76,590 MT

Cast boostersLicensed capacities 1500 MT

75%Revenue share

25%Revenue share

4 |Solar Industries India Limited

Manufacturing facilitiesSpread across 16 locations in 8 states across India, SIIL’s manufacturing facilities are ISO 9001:2000 certified. The Company has set up manufacturing units in Africa and is in the process of setting up another manufacturing facility in Europe.

Export presence

IndiaMaharashtra, Madhya Pradesh, Chhattisgarh, Orissa, Jharkhand, West Bengal, Rajasthan and Andhra Pradesh

AfricaZambia, Nigeria

Ghana

Nigeria

Greece

Turkey

Madagascar Mauritius

Sri LankaMalaysia

Indonesia

South Africa

UgandaKenya

Ethiopia

OmanJordan

TanzaniaZambia

Company Overview Strategic Review Board & Management Reports Financial Statements

Annual Report 2010-11 |5

2007-08

2007-08

2007-08

32,104.4953,037.94

59,019.3272,285.81

2008-09

2008-09

2008-09

2009-10

2009-10

2009-10

2010-11

2010-11

2010-11

Gross Turnover (Rs. in lacs)

CAGR31.07 %

7,101.009,573.33 11,199.78

14,847.28

EBIDTA (Rs. in lacs)

CAGR27.87 %

3,611.78 4,413.635859.37

7559.66

PAT (Rs. in lacs)

CAGR27.92 %

Year on Year Performance Meter

22.48% YoY Gross Turnover

32.57% YoY EBIDTA

29.02% YoY PAT

2009-10

112,000 MT2010-11

135,000 MT20.53% increase in sale volume


20.85 25.4833.82

43.64

EPS – Basic (Rs.)

19.61 20.24 22.43 24.35

Return on Net Worth (%)

18.1922.14 24.36 25.56

Return on capital employed at PBT level (%.)

8.56% YoY Net Worth

181 bps EBIDTA margin

66 bps PAT margin

Note: Exports from India includes sales to overseas subsidiaries.

2007-08

2007-08

2007-08

2008-09

2008-09

2008-09

2009-10

2009-10

2009-10

2010-11

2010-11

2010-11

2009-10

Rs. 61.19 crore2010-11

Rs.113.90 crore86.14% increase in exports



Chairman’s perspective

Dear Shareholders,One has to be constantly on the move, to maintain consistent growth. As leaders in our industry, we learnt this lesson early and have constantly invested our business with vision and foresight. Consequently, we worked towards rapidly expanding our business in geographic terms, along with synergistic diversifications that entail a healthy contribution, leverage our industrial expertise, and result in enhanced shareholder value.

I am pleased to report to you that Solar Industries performed well in 2010-11, registering a healthy growth in our revenue and margins. The strong growth in numbers has been possible due to increased domestic and overseas market penetration and enhanced operational efficiencies.

We are positive on the prospects and potential of our business, and expect to grow at a rate higher than the general economic growth. The reasons for our optimism and confidence are both internal and external. Stringent safety norms, consistent product quality and strong infrastructure have been the pillars of our service to our customers, and will continue to yield results for us. Also, the Indian economy which will continue to grow at above 8% level in the Twelfth Plan period will entail tremendous investments in infrastructure, particularly power, roads, steel cement and coal.

Solar is committed to leverage these opportunities and garner a major share of this impending growth, whilst retaining its leadership position. At the same time, we are increasing our focus on operational-efficiency to world-class levels.

I am proud to share with you, that we have started our first overseas plant in Zambia. This bulk explosive plant with a

production capacity of 10,000 tonnes, will cater to the needs of mining customers in Zambia and Congo. Further our second plant at Nigeria for cartridge explosives which was long overdue has been commissioned, and the commercial production will commence soon. We are now looking forward to set up manufacturing facilities in a joint venture in Turkey, for which the basic formalities have been completed and land has been acquired.

With our experience and knowledge of explosives and explosives related substances, another area where we visualise significant potential is in the Defence Sector. I am happy to inform you that we are now in the process of developing specific products for the Defence Sector using the expertise available with us.

Last year, we had entered into strategic diversification and forward integration by extending our business into coal mining viz. The Bhatgaon coal block and Madanpur coal block. The Bhatgaon coal block with a reserve of almost 80 million MT is expected to become operational in couple of years, with various consents and clearances being already obtained. The Madanpur coal block with a reserve of 36 million MT is categorised as ‘No-

Stringent safety norms, consistent product quality

and strong infrastructure have been the pillars of

our service to our customers, and will continue to

yield results for us.


Go-Area’ by the Ministry of Environment and Forests. However, we are extremely hopeful that this block will be cleared.

All these prospects are dependent upon people, and we are conscious of the need to build a good, responsible and strategically capable team. During the year, significant impetus was placed on team building and skill enhancement. We have invested in training so that our people (both new and existing) are abreast of the latest developments and are fully equipped to take on the future with confidence.

Apart from training and skills development, our keen focus on safety, quality and environment are the cornerstones of our success. Considering the sensitive nature of our products, we adhere to stringent safety and quality standards at every step of our process, be it design, development, manufacture, storage, transport or distribution. Our long-standing association with SAFEX, an international body that dictates safety norms in explosives, has added to the steps we take to align ourselves with the best safety practices in the world.

The confidence of expanding our horizons is a reflection of the overwhelming support of our stakeholders, shareholders, bankers, customers and of course, our workmen, officers and staff. Our transparent approach makes me optimistic of achieving our goals.

Best Wishes

Satyanarayan Nuwal

All these prospects are dependent upon people,

and we are conscious of the need to build a good,

responsible and strategically capable team. During

the year, significant impetus was placed on team

building and skill enhancement. We have invested

in training so that our people are abreast with the

latest developments and are fully equipped to take

on the future with confidence.

Annual Report 2010-11 |9Annual Report 2010-11 |9


Expanding horizons…

Ready for India’s future infrastructural needs

As catalysts of infrastructural development in India, we shall reap direct benefit from the robust investment across the various infrastructure projects in India.

100,000 MW+Estimated capacity addition requirement during the period of the Twelfth Plan (75,000 MW of coal based)

(Source: The Central Electricity Authority)

Power

72.9 million MTto 120 million MTIncrease in steel production capacity by 2012 driven through expansions by steel majors - SAIL, RINL, NMDC, JSW, Jindal Steel & Power, SR Steels and Tata Steel among others

Steel

550 million MTExpected increase in the cement demand by 2020

(Source: Business Standard)

Cement

7,994 KmsRoad construction projects awarded by NHAI keeping in line with the Ministry’s dictum of building 20 km-a-day

Road

Rs. 41 lacs croreExpected investment in the infrastructure sector in the Twelfth Plan period

Infrastructure

Consequently, demand for coal, iron ore, limestone and road metal shall increase substantially which shall result in increased demand for explosives. Our business spread will help supply to future needs of related segments and uphold our market leadership.


Charting new destinations: Zambia and Nigeria

Our new manufacturing facilities in Zambia and Nigeria will help us in catering our customers in a better way and strengthen our foothold in nearby markets.

13.14% Total revenue contribution from the overseas operations in FY 2010-11

Manufacturing facility at Zambia

Manufacturing facility at Nigeria


Exploring,not just exploding:coal mine acquisition

The Company considers its two coal blocks at Madanpur and Bhatgaon to be its treasures. Once rendered operational, the forward integration into coal mining will open the avenues of a strong source of additional revenue.

80 million MT Total geological reserves at Bhatgaon

36 million MT Allotment of coal mines in Madanpur

Safety, health, environment andhuman resources

140 Learning incidents in 2010-11

3.14 million Total accident free man-hours worked since last lost time accident

128 Learning incidents in 2009-10

Training conducted Personnel trained Total manhours of training

Supervisor/ Executive

Operator Supervisor/ Executive

Operator Supervisor/ Executive

Operator

120 230 705 3721 2115 11000

SafetyAt Solar, safety is top operational priority. Our organised contingency safety precautions can address any unforeseen accidents that may occur during the manufacturing process.

SAFEXSolar’s association with SAFEX, (an international body that dictates safety norms in explosives) results in higher awareness about possible incidents in explosives companies all over the world. The Company picks up key learning from these cases and applies it in operational and manufacturing processes, thus strengthening its own safety standards to be in line with the international norms.

The concept of reporting ‘Learning Incidents’ has been adapted by plant personnel at all levels, actively. It is an incident or observation which could have possibly led to an accident or injury. The increasing number of incidents reported indicates deepening awareness towards safety. The Company awards those employees who report the maximum number of learning incidents duringthe year.


HealthAt Solar, we prize the health of our employees and workers, as well as their families just as much as we prize the health of our organization. To make health related issues less burdensome, we have undertaken several initiatives that enables our employees to mitigate contingencies without the ensuing stress.

All our employees are covered under the Employee Personal Accident policy from the very first day of their service. This policy provides safety on health related aspects

A compensation policy for all workers covers accidental damage, accidental disability and accidental death, for all plant workers

Group Mediclaim policy covers the employees’ family members (parents, spouse and up to two children)

Cashless facility for hospital treatment, so the employee can easily handle family health related expenses

Periodical medical check-ups for employees and workers

A dedicated physician has been appointed at the manufacturing facility to address any accidents and provide first-aid treatment and refer to the hospital for further treatment

The Company also has a well-stocked and accessible first-aid kit, essential safety accessories, mineral water for drinking and landscaping and gardening to make the campus a pleasant environment in which to work.

Environment At Solar, we take stringent measures to protect the environment. We adopt eco-friendly technology at every step with a focus on minimising pollution, control waste and conserve natural resources.

Apart from the successful implementation of the ISO 9001-2008, the Company also conforms to the Environmental management system (ISO 14001-2004) and OHSAS (18001-2007) for Occupational Health and Safety certifications.

Human ResourcesThe leadership position attained by the Company over the years is largely due to the dedication and commitment of its people.

Hence to manage the change of the business landscape, the Company has invested substantially in the development of its human capital. We recruit and retain the best talent and ensure skill and personality development of our work force by internal and external training at all levels. We believe that our people will be the biggest drivers of our growth and diversification agenda and therefore, we build significant capabilities in the relevant disciplines.



Our Board of Directors

Mr. Satyanarayan Nuwal Mr. Kailashchandra Nuwal

Mr. Manish Nuwal Mr. Kundan Singh Talesra Mr. Roomie Dara Vakil



Rs. in lacs

Particulars 2010-11 2009-10 2008-09

Gross Turnover 72,285.81 59,019.32 53,037.94

Excise Duty 4,340.73 3,277.93 4,258.81

Other Income 2,701.77 2,598.79 2,599.09

Total Expenditure 57,841.64 49,261.33 44,775.22

EBIDTA 14,847.28 11,199.78 9,573.33

Depreciation 766.21 784.96 621.84

Profit Before Tax 12,805.22 9,078.84 6,603.00

Profit After Tax 7,559.66 5,859.37 4,413.63

Gross Block 24,114.14 15,133.47 14,457.16

Net Fixed Assets 22,182.72 13,559.70 11,978.38

Investments 1,225.80 1,044.67 440.97

Net Current Assets 27,919.50 23,709.69 17,844.88

Cash & Bank Balance 6,702.33 9,397.83 7,293.85

Total Debts 16,168.11 10,767.83 7,174.49

Share Capital 1,732.38 1,732.38 1,732.38

Reserves & Surplus 29,871.58 24,792.00 20,351.38

Net Worth 31,050.01 26,120.36 21,802.00

Earning Per Share(Basic) (In Rs.) 43.64 33.82 25.48

Financial Highlights (Consolidated)


Noticecalling Annual General Meeting

Notice is hereby given that the Sixteenth Annual General Meeting of the members of the Company will be held on Wednesday, 10th August, 2011 at 12.30PM at Hotel Tuli Imperial, Central Bazar, Ramdaspeth, Nagpur - 440 010, Maharashtra to transact the following business:

Ordinary Business:ITEM NO. 1To receive, consider and adopt the Balance Sheet as at31st March, 2011 and the Profit & Loss Account of the Company for the year ended on that date along with the Reports of the Director’s and Auditor’s thereon.

ITEM NO. 2To declare Dividend on the Equity Shares for the Financial Year ended on 31st March, 2011.

ITEM NO. 3To appoint a Director in place of Shri Kailashchandra Nuwal, who retires by rotation and being eligible, seeksre-appointment.

ITEM NO. 4To appoint a Director in place of Shri Manish Nuwal, who retires by rotation and being eligible, seeks re-appointment.

ITEM NO. 5To appoint a Director in place of Shri Kundan Singh Talesra, who retires by rotation and being eligible, seeks re-appointment.

ITEM NO. 6To appoint a Director in place of Shri Anant Sagar Awasthi, who retires by rotation and being eligible, seeks re-appointment.

ITEM NO. 7To appoint Auditors and to fix their remuneration and in this regard to consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“ RESOLVED THAT M/s Gandhi Rathi & Co, Chartered Accountants, be and are hereby appointed as Auditors of the Company, to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company on such remuneration as shall be fixed by the Board of Directors.”

Special Business:ITEM NO. 8To consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT in accordance with the provisions of Section 257 and all other applicable provisions, if any, of the Companies Act, 1956 or any statutory modification(s) orre-enactment thereof, Shri Anand Kumar, who was appointed as a Director in casual vacancy pursuant to the provisions of Section 262 of the Companies Act, 1956 and Article 185 of the Articles of Association of the Company, be and is hereby appointed as a Non-Executive Independent Director of the Company liable to retire by rotation.”

ITEM NO. 9To consider and if thought fit to pass with or without modification following resolution as an Ordinary resolution:

“RESOLVED THAT in accordance with the provisions of Sections 198, 269, 309, 310 read with Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof, approval of the Company be and is hereby accorded to the re-appointment of Shri Satyanarayan Nuwal as Executive Director of the Company, for a period of 5 (Five) years with effect from 1st April, 2011, on the terms and conditions including remuneration as set out in the Explanatory Statement annexed to the Notice convening this Meeting, with liberty to the Board of Directors (hereinafter referred to as “the Board” which term shall be deemed to include any Committee of the Board constituted to exercise its powers, including the powers conferred by this Resolution) to alter and vary the terms and conditions of appointment and / or remuneration, subject to the same not exceeding the limits specified under Schedule XIII of the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof.”

“RESOLVED FURTHER THAT the Board be and is hereby authorised to do all acts and take all such steps as may be necessary, proper or expedient to give effect to this Resolution.”

ITEM NO. 10To consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:



“RESOLVED THAT in accordance with the provisions of Sections 198, 269, 309, 310 read with Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof, approval of the Company be and is hereby accorded to the appointment ofShri Kailashchandra Nuwal as Executive Director of the Company, for a period of 5 (Five) years with effect from 1st April, 2011, on the terms and conditions including remuneration as set out in the Explanatory Statement annexed to the Notice convening this Meeting, with liberty to the Board of Directors (hereinafter referred to as “the Board” which term shall be deemed to include any Committee of the Board constituted to exercise its powers, including the powers conferred by this Resolution) to alter and vary the terms and conditions of appointment and / or remuneration, subject to the same not exceeding the limits specified under Schedule XIII of the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof.”



“RESOLVED THAT in accordance with the provisions of Sections 198, 269, 309, 310 read with Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof, approval of the Company be and is hereby accorded to the appointment of Shri Manish Nuwal as Executive Director of the Company, for a period of 5 (Five) years with effect from 1st April, 2011, on the terms and conditions including remuneration as set out in the Explanatory Statement annexed to the Notice convening this Meeting, with liberty to the Board of Directors (hereinafter referred to as “the Board” which term shall be deemed to include any Committee of the Board constituted to exercise its powers, including the powers conferred by this Resolution) to alter and vary the terms and conditions of appointment and / or remuneration, subject to the same not exceeding the limits specified under Schedule XIII of the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof.”


ITEM NO. 12 To consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to Section 198, 269, 309, 310 read with Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof, the Company hereby approves the appointment of Shri Kundan Singh Talesra as Executive Director of the Company for a period of 3 (Three) years and revision of remuneration with effect from 1st April, 2011 in the following manner:

Salary – Rs. 3,00,000/- per month.

Gratuity: Benefits in accordance with the rules and regulations in force in the Company from time to time, but shall not exceed a half month’s salary for each completed year of service subject to a ceiling of Rs. 3,00,000/-.

Car & Telephone: Free use of car with driver & Telephone at his residence for use on Company’s business.

Housing : Rent free furnished accommodation along with benefits upto (Rs. 1,50,000/- per Annum).

“RESOLVED FURTHER THAT the scope and quantum of remuneration and perquisites specified herein above, may be enhanced, enlarged, widened, altered or varied by the Board of Directors in the light of and in conformity with any amendments to the relevant provisions in the Companies Act and/or the rules and regulations made there under and/or such guidelines as may be announced by the Central Government from time to time.”

“RESOLVED FURTHER THAT in the event of absence or inadequacy of profits in any financial year during currency of tenure of service of Shri Kundan Singh Talesra, the payment of salary, commission, perquisites and other allowances shall be governed by the limits prescribed under sectionII of the part II of Schedule XIII to the Companies Act, 1956 including any statutory modifications or re-enactments thereof as may be for the time being, in force.”

“RESOLVED FURTHER THAT the Company shall pay to or reimburse Shri Kundan Singh Talesra and he shall be entitled to pay and /or to be reimbursed by the Company all costs, charges


and expenses that may have been or may be incurred by him for the purposes of or on behalf of the Company.”


RESOLVED THAT pursuant to Section 198, 269, 309, 310 read with Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 or any statutory modification(s) or re-enactment thereof, the Company hereby approves there-appointment of Shri Roomie Dara Vakil as Executive Director of the Company for a period of 3 (Three) years and revision of remuneration with effect from 1st April, 2011 in the following manner:

Salary – Rs. 3,00,000/- per month.

Gratuity: Benefits in accordance with the rules and regulations in force in the Company from time to time, but shall not exceed a half month’s salary for each completed year of service subject to a ceiling of Rs. 3,00,000/-.

Car & Telephone: Free use of car with driver & Telephone at his residence for use on Company’s business.

“RESOLVED FURTHER THAT the scope and quantum of remuneration and perquisites specified herein above, may be enhanced, enlarged, widened, altered or varied by the Board of Directors in the light of and in conformity with any amendments to the relevant provisions in the Companies Act and/or the rules and regulations made there under and/or such guidelines as may be announced by the Central Government from time to time.”

“RESOLVED FURTHER THAT in the event of absence or inadequacy of profits in any financial year during currency of tenure of service of Shri Roomie Dara Vakil, the payment of salary, commission, perquisites and other allowances shall be governed by the limits prescribed under sectionII of the part II of Schedule XIII to the Companies Act, 1956 including any statutory modifications or re-enactments thereof as may be for the time being, in force.”

“RESOLVED FURTHER THAT the Company shall pay to or reimburse Shri Roomie Dara Vakil and he shall be entitled to pay and /or to be reimbursed by the Company all costs, charges and expenses that may have been or may be incurred by him for the purposes of or on behalf of the Company.”

By Order of the Board of Directors

Registered office:11, Zade Layout, Bharat Nagar, Nagpur - 440 033

(Khushboo A. Pasari)Company Secretary

Place: NagpurDate: 19.05.2011

NOTES:

1. An explanatory statement pursuant to Section 173 (2) of the Companies Act, 1956 in respect of the special business is annexed hereto.

2. A member entitled to attend and vote is entitled to appoint a proxy to attend and vote instead of himself / herself and the proxy need not be a member of the Company. The instrument of proxy in order to be effective, must be deposited at the registered office of the Company, duly completed and signed not less than 48 hours before the meeting.

3. The Register of Members and Share Transfer books of the Company will remain closed from 2nd August, 2011 to 10th August, 2011 (both days inclusive) for determining the names of members eligible for dividend on equity shares if declared at the Annual General Meeting.

4. Members holding shares in physical form are requested to intimate immediately to the Registrar & Share Transfer Agent of the Company, M/s Link Intime India Private Limited, C-13, Pannalal Silk Mills Compound, LBS Marg, Bhandup (W), Mumbai 400 078, quoting Registered folio number, details of their Bank Account/Change in Bank Account, if any to enable the Company to print these details on the Dividend warrants, and change in their address, if any, with Pin Code Number. Members holding shares in electronic form shall address communication to their respective DepositoryParticipants only.

5. The payment of Dividend, upon declaration by the shareholders at the forth coming Annual General Meeting, will be made on or after 16th August, 2011 as under:

a) To all those beneficial owner(s) holding shares in electronic form as per the beneficial ownership data as may be made available to the Company by National Securities Depository Limited (NSDL)




Registered office:11, Zade Layout, Bharat Nagar,Nagpur - 440 033



and the Central Depository Services (India) Limited (CDSL) as of the end of the day on1st August, 2011.

b) To all those shareholders holding shares in physical form after giving effect to all the valid share transfers lodged with the Company before the closing hours on 1st August, 2011.

6. Shareholders desiring any information relating to the accounts are requested to write to the Company at an early date so as to enable the management to keep the information ready.

7. For the convenience of members and for proper conduct of the meeting, entry to the place of meeting will be regulated by attendance slip, which is a part of the Annual Report. Members are requested to sign at the place provided on the attendance slip and hand it over at the entrance of the venue.

8. The brief profile of the Directors proposed to be appointed / re-appointed is given in the section on Corporate Governance.

Important Communication to Members

The Ministry of Corporate Affairs has taken a “Green Initiative in the Corporate Governance” by allowing paperless compliances by the companies and has issued circulars stating that service of notice / documents including Annual Report can be sent by e-mail to its members. To support this green initiative of the Government in full measure, members who have not registered their e-mail addresses, so far, are requested to register their e-mail addresses, in respect of electronic holdings with the Depository through their concerned Depository Participants.

Explanatory statement pursuant to Section 173(2) of the Companies Act, 1956

ITEM NO. 3, 4, 5 & 6.Details of Directors seeking re-appointment at the 16th Annual General Meeting.

As regards re-appointment of retiring directors vizShri Kailashchandra Nuwal, Shri Manish Nuwal, Shri Kundan Singh Talesra and Shri Anant Sagar Awasthi, referred to in item Nos 3, 4, 5 & 6 of the Notice, brief resumes of these Directors, nature of their expertise in specific functional areas names of Companies in which they hold directorships/chairmanship of Board Committees their shareholding and relationships between directors inter-se as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges are provided under the heading “Corporate Governance”, which forms part of the Annual Report. The Board of Directors commends their respective re-appointments.

ITEM NO. 8Details of Director seeking appointment at the 16th Annual General Meeting

The Board of Directors of the Company (the Board), at its meeting held on 29th October, 2010 has appointed, pursuant to the provisions of Section 262 of the Companies Act, 1956 (the Act) and Article 185 of the Articles of Association of the Company, Shri Anand Kumar by filling up the casual vacancy arising on account of resignation of Dr. Rishi Narain Singh, a Director.

In terms of the provisions of Section 262 of the Act, Shri Anand Kumar would hold office up to the date of this Annual General Meeting, as Dr. R.N. Singh, would have held office only up to the date of this Annual General Meeting.

The Company has received a notice in writing from a member proposing the candidature of Shri Anand Kumar for the office of


Director of the Company under the provisions of Section 257 of the Act.

Shri Anand Kumar has to his credit wide experience, expertise and knowledge; it will be in the interest of the Company that Shri Anand Kumar be appointed as a Non- Executive Independent Director, who shall be liable to retire by rotation in accordance with the provisions of the Articles of Association of the Company.

A brief resume of Shri Anand Kumar, nature of his expertise in specific functional areas and names of companies in which he holds directorship and membership / chairmanship of Board Committees, as stipulated under Clause 49 of Listing Agreement with the Stock Exchanges in India are provided in the Report on Corporate Governance forming part of the Annual Report.

The Board commends the resolution set out at Item No. 8 of the Notice for your approval.

None of the Directors except Shri Anand Kumar is interested in the above resolution.

ITEM NO. 9The Board of Directors have re-appointed Shri Satyanarayan Nuwal as Chairman and Executive Director for a period of 5 years from 1st April, 2011. Further, as per the recommendation of the Remuneration Committee, and as prescribed in Schedule XIII of the Companies Act, 1956, the remuneration ofShri Satyanarayan Nuwal has been fixed for a period of five years in the following manner

i) Salary – Rs. 10,00,000/- per month.

ii) Commission – Commission on the net profit of the Company for each financial year not exceeding 1 % of the Company’s Net Profit.

iii) Perquisites – Perquisites shall be restricted to an amount equal to the annual salary or Rs. 50, 00,000/- per annum whichever is less.

Perquisites are classified into following categories.

iv) Medical Reimbursement: Reimbursement of the expenses incurred by the Director for self and family subject to a ceiling of one month’s salary in a year or three months salary over a period of three years.

v) Leave Travel Concession: Leave Travel Concession for Director and his family, incurred in accordance with the rules of the Company.

vi) Personal Accident Insurance: Personal accident Insurance of an amount, the annual premium of which does not exceed Rs. 5,000/-.

vii) Club Fees: Fees of clubs subject to a maximum of two clubs. This will not include admission and lifemembership fees.

viii) Pension/Superannuation: Benefits in accordance with the rules and regulations in force in the Company from time to time. The Company’s contribution to Provident Fund, Superannuation Fund and /or Annuity Fund will not be included in the computation of the ceiling on perquisites to the extent of the same either or put together are not taxable under the Income Tax Act.

ix) Gratuity: Benefits in accordance with the rules and regulations in force in the Company from time to time, but shall not exceed a half month’s salary for each completed year of service subject to a ceiling of Rs. 50,00,000/-.

x) Car & Telephone: Free use of car with driver & Telephone at his residence for use on Company’s business.

xi) Leave: Leave on full pay and allowance at the rate of one month for every eleven months of service with liberty to accumulate such leave for a period of six months. Leave encashment for a maximum of six months, accumulated leave to be permitted at the end of the term.

xii) Benefits under the loan and other schemes in accordance with the practices, rules and regulations in force in Company, from time to time.

xiii) Such other benefits and amenities as may be, provided by the Company to other senior officers from time to time. The Company shall pay to or reimburse to him and he shall be entitled to pay and /or to be reimbursed by the Company all costs, charges and expenses that may have been or may be incurred by him for the purposes of or on behalf of the Company.

xiv) Provident Fund: Company’s contribution towards provident fund, subject to ceiling of 10% of the salary

A brief profile of the director is as given elsewhere in this Annual Report.

According to Section 269 of the Companies Act, 1956, read with Schedule-XIII to the said Act, the appointment of Chairman and Executive Director requires the approval of the shareholders in General Meeting. Your Directors recommend that the resolution be passed as an ordinary resolution. The Explanatory Statement together with the accompanying notice may also be regarded as an abstract of the terms of appointment of Shri Satyanarayan Nuwal, Executive Director of the Company and Memorandum

of interest of Directors u/s. 302 of the Companies Act, 1956.

None of the Directors except Shri Satyanarayan Nuwal, is interested in the proposed resolution.




ITEM NO. 10The Board of Directors have appointed Shri Kailashchandra Nuwal as Executive Director for a period of 5 years from 1st April, 2011. Further, as per the recommendation of the Remuneration Committee, and as prescribed in Schedule XIII of the Companies Act, 1956, the remuneration of Shri Kailashchandra Nuwal has been fixed for a period of five years in the following manner



iii) Perquisites – Perquisites shall be restricted to an amount equal to the annual salary or Rs. 50, 00,000/- per annum whichever is less.


iv) Medical Reimbursement: Reimbursement of the expenses incurred by the Director for self and family subject to a ceiling of one month’s salary in a year or three months salary over a period of three years.

v) Leave Travel Concession: Leave Travel Concession for Director and his family, incurred in accordance with the rules of the Company.

vi) Personal Accident Insurance: Personal accident Insurance of an amount, the annual premium of which does not exceed Rs. 5,000/-

vii) Club Fees: Fees of clubs subject to a maximum oftwo clubs. This will not include admission and life membership fees.

viii) Pension/Superannuation: Benefits in accordance with the rules and regulations in force in the Company from time to time. The Company’s contribution to Provident Fund, Superannuation Fund and /or Annuity Fund will not be included in the computation of the ceiling on perquisites to the extent of the same either or put together are not taxable under the Income Tax Act.

ix) Gratuity: Benefits in accordance with the rules and regulations in force in the Company from time to time, but shall not exceed a half month’s salary for each completed year of service subject to a ceiling of Rs. 50,00,000/-.

x) Car & Telephone: Free use of car with driver & Telephone at his residence for use on Company’s business.

xi) Leave: Leave on full pay and allowance at the rate of one month for every eleven months of service with liberty to accumulate such leave for a period of six months. Leave encashment for a maximum of six months, accumulated leave to be permitted at the end of the term.

xii) Benefits under the loan and other schemes in accordance with the practices, rules and regulations in force in Company, from time to time.

xiii) Such other benefits and amenities as may be, provided by the Company to other senior officers from time to time. The Company shall pay to or reimburse to him and he shall be entitled to pay and /or to be reimbursed by the Company all costs, charges and expenses that may have been or may be incurred by him for the purposes of or on behalf of the Company.

xiv) Provident Fund: Company’s contribution towards provident fund, subject to ceiling of 10% of the salary

A brief profile of the director is as given elsewhere in this Annual Report.

According to Section 269 of the Companies Act, 1956, read with Schedule-XIII to the said Act, the appointment of Executive Director requires the approval of the shareholders in General Meeting. Your Directors recommend that the resolution be passed as an ordinary resolution. The Explanatory Statement together with the accompanying notice may also be regarded as an abstract of the terms of appointment of Shri Kailashchandra Nuwal, Executive Director of the Company and Memorandum of interest of Directors u/s. 302 of the Companies Act, 1956.

None of the Directors except Shri Kailashchandra Nuwal, is interested in the proposed resolution

ITEM NO. 11The Board of Directors have appointed Shri Manish Nuwal as Executive Director for a period of 5 years from 1st April, 2011. Further, as per the recommendation of the Remuneration Committee, and as prescribed in Schedule XIII of the Companies Act, 1956, the remuneration of Shri Manish Nuwal has been fixed for a period of five years in the following manner



26 |Solar Industries India Limited26 |Solar Industries India Limited

iii) Perquisites – Perquisites shall be restricted to an amount

equal to the annual salary or Rs. 50, 00,000/- per annum

whichever is less.


iv) Medical Reimbursement: Reimbursement of the expenses

incurred by the Director for self and family subject to a

ceiling of one month’s salary in a year or three months

salary over a period of three years.

v) Leave Travel Concession: Leave Travel Concession for

Director and his family, incurred in accordance with the

rules of the Company.

vi) Personal Accident Insurance: Personal accident Insurance

of an amount, the annual premium of which does not

exceed Rs. 5,000/-

vii) Club Fees: Fees of clubs subject to a maximum of

two clubs. This will not include admission and life

membership fees.

viii) Pension/Superannuation: Benefits in accordance with the

rules and regulations in force in the Company from time

to time. The Company’s contribution to Provident Fund,

Superannuation Fund and /or Annuity Fund will not be

included in the computation of the ceiling on perquisites to

the extent of the same either or put together are not taxable

under the Income Tax Act.

ix) Gratuity: Benefits in accordance with the rules and

regulations in force in the Company from time to time, but

shall not exceed a half month’s salary for each completed

year of service subject to a ceiling of Rs. 50,00,000/-.

x) Car & Telephone: Free use of car with driver & Telephone at

his residence for use on Company’s business.

xi) Leave: Leave on full pay and allowance at the rate of one

month for every eleven months of service with liberty to

accumulate such leave for a period of six months. Leave

encashment for a maximum of six months, accumulated

leave to be permitted at the end of the term.

xii) Benefits under the loan and other schemes in accordance

with the practices, rules and regulations in force in

Company, from time to time.

xiii) Such other benefits and amenities as may be, provided by

the Company to other senior officers from time to time. The

Company shall pay to or reimburse to him and he shall be

entitled to pay and /or to be reimbursed by the Company

all costs, charges and expenses that may have been or may

be incurred by him for the purposes of or on behalf of the

Company.

xiv) Provident Fund: Company’s contribution towards provident

fund, subject to ceiling of 10% of the salary

A brief profile of the director is as given elsewhere in this

Annual Report.

According to Section 269 of the Companies Act, 1956,

read with Schedule-XIII to the said Act, the appointment of

Executive Director requires the approval of the shareholders

in General Meeting. Your Directors recommend that

the resolution be passed as an ordinary resolution. The

Explanatory Statement together with the accompanying

notice may also be regarded as an abstract of the terms



of appointment of Shri Manish Nuwal, Executive Director

of the Company and Memorandum of interest of Directors

u/s. 302 of the Companies Act, 1956.

None of the Directors except Shri Manish Nuwal, is

interested in the proposed resolution.

ITEM NO. 12 & 13

The Board of Directors have appointed Shri Kundan Singh

Talesra and re-appointed Shri Roomie Dara Vakil as Executive

Director for a period of 3 years from 1st April, 2011.

In view of their status in the industry, standard and cost of living,

increasing responsibilities on account of expanding business

activities within India and abroad, time and effort put in by

them towards managing affairs of the Company, the Board has,

subject to the approval of shareholders revised the remuneration

of Shri Kundan Singh Talesra and Shri Roomie Dara Vakil with

effect from 1st April, 2011 as contained in resolution no. 12

&13.

As per Section I of Part-II of Schedule XIII to the Companies

Act, 1956, if the Company has adequate profits, the Board may

fix / revise remuneration within the ceiling as provided in Section

198 and 309 of that Act which is 10% of the net profits. As

per the audited accounts for the FY 2010-11, the Company

has earned net profit of Rs. 8295.54 Lacs, which is considered

sufficient for the purpose of payment of proposed remuneration

to the managerial personnel of the Company.

In terms of Section 310 read with Schedule XIII to the

Companies Act, 1956, the Board can revise the remuneration

subject to approval of the shareholders in general meeting. The

Board has considered these resolutions in the meeting held on

19th May, 2011 and recommends these resolutions for your

approval.

The terms of revision of remuneration given in the said resolutions

may be treated as abstract of terms of remuneration of the said

directors under Section 302 of the Companies Act, 1956.

Shri Kundan Singh Talesra and Shri Roomie Dara Vakil are

interested in their respective Resolutions.


Registered office:11, Zade Layout, Bharat Nagar Nagpur, 440 033




Director’s Report

To,The Members;Solar Industries India Limited;

We take pleasure in presenting Sixteenth Annual Report of the Company together with the Annual Accounts (Standalone & Consolidated) for the year ended 31st March, 2011.

Performance Highlights (Standalone):

(Rs. in Lacs)

Particulars 2011 2010

Turnover 56767.45 50185.51

Profit Before Interest, Depreciation And Taxation 9340.80 6752.12

Less : Depreciation 663.55 632.00

Profit Before Interest And Taxation 8677.25 6120.12

Less : Interest 1106.46 1201.04

Profit Before Tax 7570.79 4919.08

Less : Provision For Taxation 2541.44 1792.55

Net Profit After Tax 5029.35 3126.53

Balance Brought Forward 3513.50 2805.73

Balance Available For Appropriation 8542.85 5932.26

Appropriation:

Interim Dividend 692.95 606.33

Proposed Dividend 692.95 606.33

Tax On Dividend 118.57 206.09

General Reserve 1500.00 1000.00

Balance Profit Carried To Balance Sheet 5538.38 3513.50

Earning Per Share (EPS) 29.03 18.05



Performance Highlights (Consolidated):

(Rs. in Lacs)

Particulars 2011 2010

Turnover 72285.81 59019.32

Profit Before Interest, Depreciation And Taxation 14847.28 11199.78

Less : Depreciation 766.21 784.96

Profit Before Interest And Taxation 14081.07 10414.82

Less : Interest 1275.86 1335.98

Profit Before Tax 12805.22 9078.84

Less : Provision For Taxation 4509.68 3219.47

Net Profit After Tax 8295.54 5859.37

Share of Profit Transfer To Minority 735.88 0.00

Balance Brought Forward 8457.74 6017.12

Balance Available For Appropriation 16017.39 11876.49

Appropriation:

Interim Dividend 692.95 606.33

Proposed Dividend 692.95 606.33

Tax On Dividend 230.18 206.09

General Reserve 3000.00 2000.00

Balance Profit Carried To Balance Sheet 11401.31 8457.74

Earning Per Share(EPS) 43.64 33.82

Results of Operations:Summary of Results for Fiscal Years 2011, 2010, and 2009

In Lacs, except % 2011 2010 2009

Percentage change 2011 versus 2010

Percentage change 2010 versus 2009

Revenue 72285.81 59019.32 53037.94 22.48% 11.28%

Operating Income 8295.54 5859.37 4413.63 41.58% 32.76%

Earning per share 43.64 33.82 25.48 29.04% 32.73%


Total gross turnover of your Company rose by 22.48 % from Rs. 59,019.32 Lacs in FY 2009-10 to 72,285.81 Lacs in FY 2010-11. The profit before interest, depreciation and tax (PBIDT), has increased by 32.57% from Rs. 11,199.78 Lacs in FY 2009-10 to Rs. 14,847.28 Lacs in FY 2010-11.

The Profit Before Tax (PBT) has increased by 41.04% from 9078.84 Lacs in FY 2009-10 to 12,805.22 Lacs in FY 2010-11 and the Profit After Tax (PAT) has increased by 29.02% from 5,859.37 Lacs in FY 2009-2010 to Rs. 7,559.66 Lacs in FY 2010-11.

Appropriations:

Dividend:

During the Year under review, your Directors had declared and paid interim dividend as per details given below:

(Rs. in Lacs)

Interim Dividend paid during the year ended 31st March, 2011

Rate of Dividend Amount ofDividend paid

Distribution tax paid by the Company

Total Outflow

Declared on 29th October, 2010 and paid on 15th November, 2010

40% 692.95 115.09 808.04

Your Director’s are please to recommend a final Dividend of Rs. 4.00 per share (40% on a par value of Rs. 10) for the approval of members. The Final Dividend if declared as above would involve an outflow of Rs. 692.95 Lacs towards the Dividend {previous year Rs. 606.33} and Rs. 115.09 Lacs towards dividend tax {previous year 103.05 Lacs} resulting in a total outflow of Rs. 808.04 Lacs as against 709.38 in the previous year. The Dividend Payout Ratio of your Company is 21.38 %.

Transfers to Reserves:We propose to transfer Rs. 3000 Lacs (39.68% of net profit for the year) to the general reserve. An amount of Rs. 2943.57 Lacs is proposed to be retained in the Profit & Loss account.

Credit Ratings:

CRISIL has re-affirmed its ratings of ‘AA-/Stable/P1+’ to the various bank facilities of Solar Industries India Limited (SIIL). The ratings reflect Solar Industries India Limited‘s strong market position, good operating efficiencies (backed by prudent raw material procurement policies and backward integration), and strong debt protection measures. To arrive at its ratings, CRISIL has combined Solar Industries India Limited’s financial and business profiles with those of its subsidiaries.

In addition to long Term rating, CRISIL has also assigned P1+ rating to Solar Industries India Limited for Short termCommercial Paper.

Commercial Paper:During the year under review, your Company has raised Funds through issue of Commercial papers of Rs. 25 Crores by earmarking the Working Capital Limit from Bank of India and State Bank of India.

Details of these Commercial Papers are summarised below:

Name of Bank From To Rate of Interest

Deutche Mutual Fund 25th May, 2010 24th August, 2010 5.40%

SBI Global 18th August, 2010 15th November, 2010 7.40%

Allahabad Bank 15th November, 2010 15th February, 2011 8.65%



Directors:

Directors Retiring by Rotation

As per Section 256 of Companies Act, 1956 and provisions containing in Articles of Association of the Company provide that at least two-third of our Directors shall be subject to retirement by rotation. One third of these retiring Directors must retire from office at each Annual General Meeting of the shareholders. A retiring Director is eligible for re-election. Mr. Manish Nuwal, Mr. Kailashchandra Nuwal, Mr. Kundan Singh Talesra, andMr. Anant Sagar Awasthi, retire by rotation and being eligible offer themselves for re-appointment at this Annual General Meeting. Boards of Directors have recommended their re-appointment for consideration of the Shareholders.

Director’s Appointment

In accordance with Section 262 of the Companies Act, 1956 and Article 185 of the Articles of Association of the Company,Mr. Anand Kumar was appointed as a Non-Executive Independent Director in casual vacancy with effect from 29th October, 2010. Mr. Anand Kumar would hold office till the conclusion of the Annual General Meeting of the Company scheduled to be held on 10th August, 2011.The requisite notices together with necessary deposits have been received from a Director pursuant to Section 257 of the Companies Act, 1956, proposing the election of Mr. Anand Kumar as a Non-Executive Independent Director of the Company.

Director’s Re-appointment

During the year under review, the Board of Directors hadre-appointed Shri Satyanarayan Nuwal and Shri Roomie Dara Vakil as Executive Director for a period of 5 years and 3 years respectively from 1st April, 2011.

Director’s Cessation

Dr. Rishi Narain Singh, a Non-Executive Independent Director has resigned from the board effective from 29th October, 2010.

The Board placed on record its deep sense of appreciation for invaluable contribution made by Dr. Rishi Narain Singh during his tenure as a Non-Executive Independent Director of the Company.

Auditors & Their Observations:M/s Gandhi Rathi & Co. Chartered Accountants, Statutory Auditors of the Company will retire at the forthcoming Annual General Meeting, and being eligible, offer themselves forre-appointment. The Company has received a certificate from the Auditors to the effect that their re-appointment, if made, would be in accordance with Section 224(1B) of the Companies Act, 1956. The Board recommends their re-appointment.

The notes to the accounts referred to in the Auditor’s Report are self-explanatory and therefore do not call for any further comments.

Particulars of Employees: There are no personnel, who were paid with the salary of a limit more than that specified under section 217 (2A) of the Companies Act, 1956.

Subsidiary Operations: As a purposeful strategy, your Company carries all its business operations through several subsidiary and associate companies which are formed either directly or as step-down subsidiaries or in certain cases by acquisition of a majority stake in existing enterprises.

Amalgamation:

During the year under review, Solar Components Pvt. Ltd. (Wholly owned Subsidiary) amalgamated with Economic Explosives Ltd (Wholly owned Subsidiary) under the provisions of Sections 391 to 394 of the Companies Act, 1956.

The said company was amalgamated, as per the order of the Hon’ble High Court of Judicature at Bombay Nagpur Bench, Nagpur dated 1st September, 2010.

Incorporation of Step Subsidiaries:During the year under review, following two step Subsidiary Companies were incorporated through our wholly owned subsidiary Solar Overseas Netherlands Cooperatie U.A.:

Solar Explochem Mauritius Ltd. at Mauritius.

Solar Overseas Netherlands B.V. at Netherlands.

Acquisitions:

During the year under review, Solar Industries India LimitedAcquired 54% stake, through its Step Subsidiary Solar Overseas Netherlands B.V. in following two Companies at Turkey:

ILCI Patlayici Maddeler Sanayi ve Ticaret A.S.

Patlayıcı Maddeler San. ve Tic. A.S. (“Patsan”),

During the year under review, Solar Industries India Limited also acquired 70% stake, in Nigachem Nigeria Limited through its Subsidiary Solar Overseas Netherlands Cooperatie U.A.

Further During the year under review, Solar Industries India Limited Acquired 65% stake, in Solar Explochem Zambia Limited through its Subsidiary Solar Overseas NetherlandsCooperatie U.A.

In the year under review, Solar Industries India Limited acquired 100% stake, in Solar Overseas Singapore PTE Limited through its Subsidiary Solar Overseas Mauritius Limited.

In the year under review, Solar Industries India Limited acquired 80% stake, in Solar Mining Services Australia PTY Limited through its step Subsidiary Solar Overseas SingaporePTE Limited.

Exemption under section 212

We have 12 subsidiaries.

The Annual Report 2010-11 does not contain the financial statements of our subsidiaries, accordingly the Company will


make available the audited annual accounts and related information of our subsidiaries, where applicable, upon request. These documents will also be available for inspection during business hours at our registered office in Nagpur, India. The same will also be published on our website, www.solarexplosives.com

As per Section 212 of the Companies Act, 1956, we are required to attach the Directors’ Report, Balance Sheet, and Profit and Loss account of our subsidiaries to the Balance Sheet of Holding Company. The Ministry of Corporate Affairs, Government of India vide its circular no. 2/2011 dated February 8, 2011 has provided an exemption to companies from complying with Section 212, provided such companies publish the audited consolidated financial statements in the Annual Report.

Statement pursuant to section 212 (8) of the Companies Act, 1956 containing details of the Subsidiaries of the Company forms part of this Annual Report.

Current Holding Structure of Solar Industries India Limited

Solar IndustriesIndia Limited

Solar Overseas Mauritius Limited

Solar NetherlandsCooporatie U.A..

Solar ExplochemZambia Limited

Solar ExplochemMauritius Ltd.

Solar Nitrochemicals Limited

NigachemNigeria Limited

Ilci Patlayici Maddeler Sanayi Ve Ticaret Anonim Sirketi

PATSAN Patlayici Maddeler Sanayi

Ve Ticaret

Solar Netherlands Overseas BV

Solar OverseasSingapore Pte Limited

PT.Solar MiningResources

Solar Mining Services PTY Ltd.

100%

0.01%

99.99%

65% 100%

65% 54%

70% 100%

100%

80%

100%

Company’s Philosophy on Corporate Governance:Corporate Governance philosophy of the Company is based on the principles of equity, fairness, transparency, spirit of law and honest communication. The Company believes that sound Corporate Governance is necessary to retain stakeholder’s trust and ensures efficient working and proper conduct of the business of the Company with integrity. Development of Corporate Governance guidelines is a continuous process which evolves over a period of time and undergoes changes to suit the changing times and needs of the business, society and the nation.

Your Company has implemented the conditions of Corporate Governance as contained in Clause 49 of the Listing Agreement with the Stock Exchanges. A separate report on Corporate Governance and Management Discussion and Analysis along with necessary certificates is given elsewhere in this report. Also certificate by M/s Gandhi Rathi & Co. Chartered Accountants, Nagpur, Statutory Auditors of the Company, confirming compliance of the conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement, is annexed to this report.



Management Discussion and Analysis Report:The Management Discussion and Analysis Report forming part of Director’s Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange(s) in India, forms part of this Annual Report. The report provides strategic direction and a more detailed analysis on the performance of individual businesses and their outlook.

CEO/CFO Certification: As required under Clause 49 of the Listing Agreement, the CEO/CFO certification is attached with the Annual Report.

Statement of Management’s Responsibility for Consolidated Financial Statements:Management is responsible for the preparation of the Consolidated Financial Statements and related information that are presented in this report. The Consolidated Financial Statements of the Company and its subsidiaries, which include amounts based on management’s estimates and judgments, have been prepared in conformity with Accounting Standard 21 prescribed by The Institute of Chartered Accountants of India, forms part of this Annual Report and Accounts.

The Company designs and maintains accounting and internal control systems to provide reasonable assurance at reasonable cost that assets are safeguarded against loss from unauthorised use or disposition, and that the financial records are reliable for preparing Financial Statements and maintaining accountability for assets. These systems are augmented by written policies, an organizational structure providing division of responsibilities, careful selection and training of qualified personnel and a program of internal audits.

The Board of Directors, through its Audit Committee meets periodically with Management and Internal Auditors to discuss matters concerning Internal Controls and Financial Reporting.

Director’s Responsibility Statement:Pursuant to section 217 (2AA) of the Companies Act, 1956 the Board of Directors hereby confirms that:

i. In the preparation of the annual accounts of the Company for the year ended 31st March, 2011, the applicable Accounting Standards had been followed and there are no departures.

ii. Accounting policies have been selected and applied consistently and judgments and estimates made that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

iii. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this act for safeguarding the assets of the Company and detecting fraud and other irregularities.

iv. Annual accounts for the year ended 31st March, 2011have been prepared on a going concern basis.

Appreciation & Acknowledgement:Your Directors wish to place on record their gratitude for the valuable guidance and support given by Government of India, various State Government departments, Financial Institutions, Banks, and various stake holders, such as, shareholders, customers, suppliers etc. The Directors also commend the continuing commitment and dedication of the employees at all levels which has been critical for the Company’s growth. Their dedication and competence has ensured that the Company continues to be a significant and leading player in an Explosives Industry. The Directors look forward to their continued support in future.

For and on behalf of the Board

Place : NagpurDate : 19th May, 2011

(Manish Nuwal)Director


Information as required under section 217(1) (E) of the Companies Act, 1956 read with Companies (Disclosure of Particulars) Rules, 1988.

Annexure 1- Forming Part of theDirector’s Report

A. Conservation of Energy

Form “A”

FORM FOR DISCLOSURE OF PARTIUCLARS WITH RESPECT TO CONSERVATION OF ENERGY.

1. Power and Fuel Consumption Current Year

Electricity

(a) Purchase unit (in Kwh.) 4471514 unit

Total Amount (in Rs.) 25090108/-

Rate/Unit (in per Kwh.) 5.61 per unit

(b) Own Generation

(i) Through diesel Generator (in Kwh) 335000 units

Total Amount (in Rs.) 3708459/-

Average Rate 11.07 per unit

(ii) Through steam Turbine/Generator unit N.A.

Units/Litre of fuel/oil

Gas

Cost/Unit

2. Coal/Solid Fuel:

Quantity M.T. 6730.053

Total Cost 22925037

Average rate/MT. 3406.368

3. Furnace Oil

Quantity (LTR). 99445

Total Cost 2688340

Average rate/ (LTR). 27.03



Form “B”

1. Research and Development (R & D)

(a) Specific area in which R&D carried out by the Company.

1. Our R&D activities can be classified into several categories, which run parallel to the activities in our principal areas of operation.

2. Chemical formulations and process validation where substantial study of the manufacturing process has been undertaken.

3. We are developing bulk delivery systems for use in tunneling and underground operations. We will launch it in next financial year.

4. We have developed the Microdet (electronic detonator) and introduced it in the Market.

(b) Benefits derived as results of above:

Commercial production of new products.

Modification of existing manufacturing process for some of the products and significant savings in cost of production.

Substantial increase in value added products.

Enhancement of safety and better environmental protection.

(c) Future plan of action:

Commercialization of newly developed products.

Few new products have been identified for which the process to manufacture will be taken up.

(d) Expenditure on R&D: NIL

Capital : Nil

Recurring : Nil

R&D Expenditure percentage of Turnover : Nil

* Expenses incurred on R & D is not accounted for separately

B. Technology Absorption, Adaptation And Innovation Efforts in Brief- The Company has a full fledged R&D Division engaged in research on new products and study on the

existing manufacturing process, optimization of process parameters to improve the product quality and for storage and process of support, transfer and site mix plants.

Technology - As soon the technology is developed for a product or manufacturing process, it is tested in our specified testing plants; the Company is keen to continuously upgrade its technology. The Company’s existing technology has been developed in house indigenously and the Company is not dependant on any foreign Technology as of now.

Benefits – Product quality improvement, reduction of storage and production losses, better lean planning & management and reduction on carrying costs.

C. Foreign Exchange Earnings and Outgo:(a) Earnings in Foreign Exchange

Export: Rs. 7267.05 LacsOn Account Commission Rs. Nil

(b) Remittances in Foreign Exchange:On account of Bank Interest Rs. 333.79 LacsOn account of Sales Commission Rs. 256.98 Lacs On account of Ocean Freight Rs. 1849.96 LacsOn account of Sales Promotion Expenses Rs. 104.63 LacsOn account of Other Expenses Rs. 311.49 Lacs


Management Discussion and Analysis

Economic overviewIndia has outperformed developed nations and emerged as one of the most successfulperformers globally. It has earned its spot as one of the most attractive investment destinations across the globe, with a vigorous 8.6% GDP growth in 2010-11. The six core industries recorded a cumulative growth rate of 5.9% during April-March 2010-11 as against 5.5% in the previous year. However, there have been concerns about high rates of inflation and increase in expenses of essential commodities like food and oil. Indian policy makers have cleared the path to ensure sustainable long-term growth.

Massive investment plans in key infrastructural sectors by the Government, combined with rise in private consumption shall enable the country to maintain its growth momentum.

Year 2006-07 2007-08 2008-09 2009-10 2010-11

GDP trend* (%) 9.6 9.3 6.8 8.0 8.6

(Source: Ministry of Finance/ CSO * Growth in GDP at factor cost at 2004-2005 prices)

26.7% - Weight of infrastructure in the index of industrial production

Industrial opportunitiesThe Indian explosives market is driven by increased spending and activity in the Indian infrastructure segment. As a result, today India’s growth rate in the explosives space has surpassed the GDP growth rate and has become the eighth largest market for explosives globally. The demand is expected to increase further with the Government increasing thrust on the country’s infrastructure development.

US$ 10 bn Rs. 24 bn

Global explosives industry Indian explosives market

Mining:India has untapped metallic mineral reserves worth 82 bn tonnes across the nation and produces around 87 minerals (metallic and non-metallic). The mining sector contributes around 2% to India’s GDP. Coal mining alone employs close to 70% of explosives manufactured in the country. The balance is shared by the steel, cement and construction sectors.

Share of mining sector in GDP (%)

(Source: Global Insights)India China Australia South

AfricaBrazil

Others

100% =

Min

1,088,168 4,722,760 899,495 240,913 1,270,425

2 24 8

98 96 92 91 98

9



Coal: India is the third largest producer of coal globally, mostly utilised in steel, power (utilities), cement, sponge iron and other industries. Coal India Limited (CIL) is the world’s largest coal producing company (comprising about 82% of India’s total production), with an annual consumption of around 65-70% of the total quantity of explosives produced in India. As per the Mid-Term Appraisal (MTA), demand for coal in India in the ter-minal year of the XIth plan (2011-12) is estimated to be 713.24 Mn MT (CAGR of 8.96%). The demand is expected to increase manifold in the decade to come, with the completion of several coal based power projects and increasing steel and cement pro-duction.

Sector-wise coal demand (estimated)

Sector Demand(Mn MT)

CAGR (%)

Steel 68.50 14.26

Power (utilities) 473 8.97

Cement 33.35 11.06

Others 138.39 6.35

Total 713.24 8.96

Steel: India became the fourth largest producer of crude steel in the world in 2010 (eighth position in 2003). The production capacity is expected to escalate to second largest in the world by 2015. Moreover, with India’s low per capita steel consumption of 46 kg (as against the global average of 198 kg) combined with massive infrastructural needs, there would be significant growth in this sector in the years to come. This would lead to a significant rise in iron ore mining of at least 9% p.a. Similarly growth in the production of zinc, lead, bauxite and other miner-als is also expected to be quite healthy. The resultant require-ment for large quantities of explosives is sure to ensue in the future.

Cement: India is the second largest cement producer globally with an overall installed capacity of about 260 Mn tonnes in 2010. But its per capita consumption is much lower as against the global average - almost a seventh of China. With extensive Government initiatives in the infrastructure and the housing sec-tor, the quantity of consumption is also slated to add to the sec-tor’s growth. According to the RNCOS report, the study foresees a 10.5% CAGR growth in cement production in the interim years 2010-14. Subsequently, the growth momentum will therefore re-flect in limestone mining, in turn creating demand for explosives.

Construction: Road construction is on a growth curve with rapid industrialisation, urbanisation, economic development and the nation’s rising expectations for improvement in the qual-ity of standard of living. Investment in construction sector ac-counts for nearly 11% of India’s Gross Domestic Product (GDP). The Road Ministry’s ambitious plans to construct 35,000 km of roads by March 2014 shall require large road metal, generating demand for a substantial quantity of explosives for the extensive quarrying.

Brief analysis of the financial statements

Total income grew 21.09 % from Rs. 58,340.18 Lacsto Rs. 70,646.85 Lacs.

EBDITA surged 32.57 % from Rs. 11,199.78 Lacs toRs. 14,847.28 Lacs.

Net profit strengthened 29.02 % from Rs. 5,859.37 Lacs to Rs. 7,559.66 Lacs.

EBDITA margin expanded 181 basis points from 19.20% to 21.01%.

Net profit margins increased 66 basis points from 10.04% to 10.70%.

EPS went up 29.04 % from Rs. 33.82 to Rs. 43.64

Revenue analysis

Revenues by geography (%)

2010-11 2009-10

Domestic 86.47 Domestic 87.43 Exports 13.53 Exports 12.57

275

(Source: Ministry of Mines)

60

2010 2025

Steel demand growth (Mt)


Revenues by customers (%)

2010-11 2009-10

Coal India Ltd 24.79

Export & Overseas 23.48

Private mining and Construction Company 41.32

Trading 10.41

Coal India Ltd 29.71

Export & Overseas 10.37

Private mining and Construction Company 42.42

Trading 17.50

Key cost components as a percentage of total revenue (%)

2010-11 2009-10

Raw Material 53.95 Raw Material 55.35

Staff Cost 4.33 Staff Cost 3.70Manufacturing Expenses 2.55 Manufacturing Expenses 2.67

Administrative Expenses 2.36 Administrative Expenses 2.07Selling and Distribution Expenses 14.69

Selling and Distribution Expenses 15.90

De-risking strategies In an unpredictable environment, a responsible organisation needs to hedge against unforeseen risks that might affect business growth. At Solar, we have developed a risk management framework that enables us to identify potential risks, measure their implications and prompt commensurate de-risking.

Risk Type Risk implication De-risking measures

Regulatory The highly sensitive commercial explosives industry is stringently regulated. Any kind of adverse decision by the concerned au-thority could impact company’s core op-erations.

1. The Company abides by all the rules and laws set by the regula-tory body and as such it has acquired all the necessary licences and approvals to set up the explosives plant.

2. It restricts its sale of products only to the licensed buyers.

Consumer concentration

Dependence on few customers can impact the revenues in the event of client attrition.

1. It shall also look forward to increase supplies to private miners, exports and construction companies.

Raw material pricevolatility

Ammonium nitrate, the core raw material used in manufacturing explosives is ex-posed to high volatility in prices due to its uneven supply. This may result in higher production costs impacting operational profitability.

1. The price escalation clause in the purchase contract enables Solar to tackle with adverse price movements.



Risk Type Risk implication De-risking measures

Expansions plans outside homelocation

With its expansions plans in overseas, the Company may find it difficult to cope up with the regulatory issues and acquiring new clients.

1. The Company has been exporting its products to these countries in the past and our local partners are aware of these local regulatory requirements and customer preferences.

2. It has strategically mapped the demand and shall now cater to them once all the facilities are fully operational.

Safety Being an explosives manufacturer, the employees are exposed to hazardous conditions. Inadequate safety measures in the event of an emergency could result in hampering company’s regular operations.

1. The Company has implemented adequate safety measures and created a hazard-free environment for smoother operations.

2. It conducts regular training programmes, periodical safety drills, upgrades safety equipment and appoints experts to monitor and advise on safety.

3. Its association with SAFEX, an international body that dictates measures to make the production of explosives a secure process, enables the Company to understand the different safety practices followed across the globe and implement the same.

FOREX The Company imports a large part of its raw material. It’s exports are also growing. As such, fluctuations in foreign exchange rates can adversely impact profitability.

1. The Company enjoys a natural hedge on almost half it’s forex exposure due to imports and exports.

2. The Company follows a conservative approach in ensuring full coverage of the balance exposure using various mechanisms to eliminate unpredictability.

HR Attrition of key resources could impact Company’s normal business operations.

1. The HR team has ensured a congenial atmosphere in an organisation and ensures that all the employees are treated well.

2. It addresses any grievances with immediate action.3. It undertakes long-term planning for every employee through

continuous training and development.

Internal control systems and their adequacyInternal controls and proper systems give authenticity to the information, reports, records, documents, transactions and serve as a strong foundation for decision making by the management. The Company has established proper internal control systems and procedures which are compatible with size of its operations and business. With a view to ensure that systems are adhered to and controls are not flouted,a firm of chartered accountants is conducting internal audit of operations, establishments, and stockyards quarterly. Audit Committee reviews the reports of Internal Auditors and monitors effectiveness and operational efficiency of internal control systems. Audit Committee is giving valuable suggestions from time to time in improving the business processes, systems and internal controls. Annual internal audit plans are prepared by internal auditors in consultation with Audit Committee and audit is conducted in accordance with this plan.


Corporate Governance

IntroductionReport for the financial year ended 31st March, 2011 on the compliance by the Company with the Corporate Governance requirements under Clause 49 of the Listing Agreement, is furnished below:

Corporate Governance is a broad term that has to do with the manner in which the rights and responsibilities are shared among owners, managers and shareholders of a given company. In essence, the exact structure of the Corporate Governance will determine what rights, responsibilities, and privileges are extended to each of the corporate participants, and to what degree each participant may enjoy those rights. Generally, the foundation for any system of Corporate Governance will be determined by several factors, all of which help to form the final form of governing the Company.

The fundamental concern of Corporate Governance is to ensure the conditions whereby a Company’s directors and managers act in the interests of the Company and its various shareholders.

Corporate Governance in Solar Industries India LimitedSolar Industries India Limited believes that governance should be functioning beyond compliances, adherence to regulatory framework, financial prudence and should create fair and transparent processes and reporting systems. Your Company is driven by its core values viz. ethical practices, concern for people at work, delight of customers and striving to meet the stakeholder’s expectations. The focused approach, professionalism of the Board and fair and transparent processes have led your Company to reach new heights.

The philosophy and practice of Corporate Governance in Solar Industries India Limited can be succinctly stated as:

Appropriate composition and size of the Board, with each Director bringing in key expertise in different areas.

Proactive flow of information to the members of the Board and Board Committees to enable effective discharge of fiduciary duties.

Ethical business conduct by the Board, management and employees.

Full-fledged systems and processes for internal controls on all operations, risk management and financial reporting.

Timely and accurate disclosure of all material operational and financial information to the stakeholders.

Solar Industries India Limited has four layers of Corporate Governance:

Governance by Board of Directors.

Governance by Sub Committees of Board of Directors.

Governance by Shareholders.

Governance of the Management Process.



First layer Governance by Board of Directors

Composition

The composition of Board of Directors as on 31st March, 2011 is as follows:

Serial No.

Category No. of Directors

Percentage

1. Executive Directors 05 50

2.Non-Executive/Independent Directors

05 50

Total 10 100

Particulars of Directors Appointed During the yearMr. Anand Kumar was appointed to fill up the casual vacancy on the Board caused by the resignation of Dr. Rishi Narain Singh in the meeting of Board of Directors held on 29th October, 2010. He holds office until this Annual General Meeting and being eligible, offers himself for appointment as Non Executive Independent Director.

Shri Anand Kumar

Shri Anand Kumar aged 60 years, is B.E. (Chemical Engineer), is Fellow AIMA, a Certified Petroleum Economist from, Oxford School of Petroleum Economics, UK, and Lead Assessor in QMS from QMS, UK. and has over 36 years of rich experience, behind him, in all facets of downstream Petroleum industry.

He was Chairman, Indian Oil Technologies Ltd- a fully owned subsidiary of Indian Oil Corporation Ltd – a fortune 500 company, and the largest Indian business entity, with turnover of more than US$ 63 billion. Prior to his superannuation, in July, 2010, he served on the Board of Indian Oil Corporation Ltd, as Director (R&D). He was also the Director In-Charge of Corporate Safety, Health and Environment of Indian Oil Corporation.

During his career in the oil industry spanning over 36 years, in India and abroad, he headed oil refineries. He worked in diverse areas of oil refining operations i.e. production, maintenance, inspection, project management, planning & execution of integrated operations of refineries and pipelines, technology identification, its evaluation, selection, project execution and commissioning etc. His area of other specialisation includes

change management, transformation and turnaround through his company wide innovative leadership, human potential development and institution building.

He has presented many papers in National and International conferences, and has over 40 papers published in various journals and 11 patents to his credit.

He is also Director of Central Coal Field Limited (CCL), Ranchi, and Director, Petrotech, New Delhi.

Particulars of Directors proposed for re-appointment:

Shri Satyanarayan Nandlal Nuwal, Chairman of Solar Industries India Limited, aged 59 years hails from Bhilwara (Rajasthan). Started his career with trading activity in the field of Explosives and Explosive Accessories, he went on to set up the manufacturing facilities. Within a decade, he made Solar Group one of the best known names in the Explosives industry.

He is also the Chairman of Economic Explosives Limited, Navbharat Coalfields Limited, Sunbeam Explosives Limited, Sunrise Explosives Limited, Solar Mines & Minerals Limited, Solar Mining Resources Limited, Solar Bhatgaon Extension Mines Private limited, Bhatgaon Extension Mines private Limited.

Shri Roomie Dara Vakil, aged 68 years, is a Post Graduate in Mining (Geology) from the Osmania University. He joined IDL Industries Limited (now known as Gulf Oil Corporation Limited) in the year 1967 and has held various positions in marketing in its Explosives division. He rose to the level of GM (Marketing) in 1992 and finally as Vice-President (Marketing). He was Secretary of Explosives Manufacturer’s Association of India for 3 years and finally elected as Chairman of the Explosives Manufacturers Association of India for the period of four year from 1997 – 2001. Currently he is the Chief Marketing Officer at our Company, managing the domestic and international marketing functions.

He is Director in Navbharat Coalfields Limited.

Particulars of Directors who retire by rotation:

In terms of Articles of Association of the Company and the relevant provisions of Companies Act, 1956 Shri Kailashchandra Nuwal, Shri Manish Nuwal, Shri Kundan Singh Talesra and Shri Anant Sagar Awasthi, retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.


Brief Resume of Directors proposed to be re-elected is given below:

Shri Kailashchandra Nandlal Nuwal, aged 53 years, younger brother of Shri Satyanarayan Nandlal Nuwal has been associated with the Group’s ventures. He is always been part of Strategic Planning of the Solar group. His instinctive knowledge of market trends has helped the Group to retain its leadership position in Explosives used in the infrastructure segment. He is Director in Economic Explosives Limited, Sunbeam Explosives Limited, Sunrise Explosives Limited, Solar Mines & Minerals Limited, Solar Mining Resources Limited and Solar Initiating Systems Limited.

Shri Manish Satyanarayan Nuwal, aged 37 years, son of Shri Satyanarayan Nandlal Nuwal, is a qualified Chartered Accountant and brings with him professional, financial and management skills. After completion of his studies he joined his family business, since 1999. He is looking after overseas projects, purchase and marketing functions of the Company. He is also working in the capacity of Chief Commercial Officer for the company. He is Director in Economic Explosives Limited, Sunbeam Explosives Limited, Sunrise Explosives Limited, Solar Mines & Minerals Limited, Solar Mining Resources Limited, Solar Initiating Systems Limited and Navbharat Coalfields Limited.

Shri Kundansingh Kanhaiyalal Talesra, aged 66 years has spent more than 41 Years in Explosive Industry in the various fields like technical service, commercial service, development of new products, sales planning, erection and commissioning of greenfield projects, and accounts and administration. For the past 11 years he has been associated with Solar Industries India Limited, responsible for planning, erection, commissioning and there after regular production, quality, administration etc. He is Director in Economic Explosives Limited.

Shri Anant Sagar Awasthi, aged 70 years, is an MA, LLB and an IAS Officer of the batch of 1965. At the start of his career as an IAS Officer he started with the position as an Assistant Commissioner Sales Tax. At the time of his retirement in the year 2001 he was Director (Higher Education - Special Secretary Education, Government of Delhi). During his career he has hold several posts in the capacity of Joint Director in Departments like Industries, Social Welfare, Food and Civil etc. He also held positions like Director Personnel MCD, Director Public Grievances, Senior General Manager, Delhi State Civil Supply Corporatoion and S.D.M., Delhi. He is also Director in Economic Explosives Limited.

Information supplied to the board members

SIIL’s Board of Directors play the primary role in ensuring good governance and functioning of the Company. All statutory and other significant and material information including information as mentioned in to Clause 49 of the Listing Agreement is placed before the Board to enable it to discharge its responsibility of strategic supervision of the Company as trustees of the shareholders. The Board also reviews periodically the

compliance of all applicable laws. The Members of the Board have complete freedom to express their opinion and decisions are taken after detailed discussion.

The normal business of the Board includes:

Annual operating plans and budgets, capital budgets, and any updates thereon,

Quarterly results of the Company,

Board remuneration policy and individual remuneration packages of Directors,

Convening a meeting of shareholders of the Company, setting the agenda thereof and ensuring that a satisfactory dialogue with shareholders takes place,

Declaration / recommendation of dividend,

Review of functioning of the Board and its Committees,

Review of functioning of the Subsidiary Companies,

Annual review of accounts for adoption by shareholders,

Materially important show cause, demand, prosecution and penalty notices,

Fatal or serious accidents or dangerous occurrences,

Any materially significant effluent or pollution problems,

Any materially relevant default in financial obligations to and by the Company or substantial non-payment for goods sold by the Company,

Details of any Joint Venture or Collaboration Agreement,

Transactions that involve substantial payment towards goodwill, brand equity or intellectual property,

Significant labour problems and their proposed solutions,

Significant development in the human resources and industrial relations front,

Sale of material nature of investments, subsidiaries, assets, which is not in the normal course of business,

Quarterly details of foreign exchange exposure and the steps taken by management to limit the risks of adverse exchange rate movement,

The Board of the Company is presented with all information under the above heads, whenever applicable. These are submitted either as part of the agenda papers well in advance of the Board meeting or are tabled in the course of the Board meeting.

Board procedures

The Company holds atleast four Board meetings in a year, one in each quarter to review the financial results and other items of the agenda and the gap between the two Board meetings do not exceed four calendar months. Apart from the four scheduled Board meetings, additional Board meetings are also convened to address the specific requirements of the Company. Urgent matters are also approved by the Board by passing resolutions



through circulation. Every Director on the Board is free to suggest any item for inclusion in the agenda for the consideration of the Board.

During the FY 2010-11, the Board of Directors met Five times i.e. on 24th May, 2010, 29th July, 2010, 29th October, 2010,18th January, 2011 & 3rd March, 2011.

Attendance record of Directors

Table: 1 Composition of the Board and Attendance records of Directors for FY 2010-11

Serial No.

Name of the Director CategoryAttendance at

Board Meeting Last AGM

1. Satyanarayan Nuwal Chairman and Executive Director 4/5 Yes2. Kailashchandra Nuwal Executive Director 3/5 Yes3. Kundan Singh Talesra Executive Director 4/5 Yes4. Roomie Dara Vakil Executive Director 4/5 ----5. Manish Nuwal Executive Director 5/5 Yes6. Anant Sagar Awasthi Non-Executive Independent Director 5/5 Yes7. Dilip Patel Non-Executive Independent Director 4/5 ---8. Satish Chander Gupta Non-Executive Independent Director 4/5 ---9. Ajai Nigam Non-Executive Independent Director 4/5 Yes10. Anand Kumar 1 Non-Executive Independent Director 2/3 ---11. Rishi Narain Singh 2 Non-Executive Independent Director 2/2 ---

1. Appointed as Director w.e.f 29th October, 2010.

2. Ceased to be Director w.e.f 29th October, 2010.

Outside Directorships and Memberships of Board committees

Table 2 gives the number of outside directorships and committee positions held by directors of the Company.

Table 2: Outside directorships/committee positions as on 31st March, 2011

Serial No.

Name of Director Category Number of Directorships(Including SIIL)

Chairmanship in committees of

Board

Membership in committees of

Board

1. Satyanarayan Nuwal Chairman and Executive Director 10 – –2. Kailashchandra Nuwal Executive Director 07 – 013. Manish Nuwal Executive Director 07 – 014. Kundan Singh Talesra Executive Director 02 – 015. Roomie Dara Vakil Executive Director 02 – –6. Anant Sagar Awasthi Non-Executive Independent Director 02 02 –7. Satish Chander Gupta Non-Executive Independent Director 12 02 038. Dilip Patel Non-Executive Independent Director 09 01 059. Ajai Nigam Non-Executive Independent Director 01 – –10. Anand Kumar 1 Non-Executive Independent Director 01 – –11. Rishi Narain Singh 2 Non-Executive Independent Director – – –

Notes Private Limited Companies, Foreign Companies and Companies under section 25 of the Companies Act, 1956 are excluded for

the above purpose. Does not include Chairmanship/Membership in Board Committees other than the Audit Committee, Shareholders’ Grievance

Committee. None of the directors were members in more than 10 committees and had not held chairmanship in more than five committees

across all companies in which he was a director as on 31st March, 2011 and none of them have acquired any disqualification as per section 274(1) (g) of the Companies Act, 1956.

1. Appointed as Directors w.e.f 29th October, 2010.

2. Ceased to be Director w.e.f 29th October, 2010.


Directors Shareholding

Table 3 provides details of equity shares held by each of the Directors in their individual name as on31st March, 2011.

Serial No.

Name No. of Equity Shares held

1. Satyanarayan Nuwal 26,62,000

2. Kailashchandra Nuwal 26,09,125

3. Manish Nuwal 8,60,813

4. Kundan Singh Talesra 100

5. Roomie Dara Vakil 10

Details of non-compliance by the company, penalties and strictures imposed on the company by stock exchanges or SEBI or any statutory authority, on any matter related to capital markets, during the last three years

The Company has complied with the requirements of the Stock Exchanges, SEBI and other statutory authorities on all matters related to the capital markets during the last three years. There were no penalties imposed nor any strictures passed on the Company by the Stock Exchanges, SEBI or any other statutory authority relating to the above.

Code of Conduct

The Board of Directors laid down a Code of Conduct for all the board members and senior management of the Company. This code has been posted on the web-site of the Companywww.solarexplosives.com.

All board members and senior management personnel have affirmed compliance with the code, a declaration to this effect signed by Executive Director Shri Manish Nuwal is given in this Annual Report.

Second Layer Governance by Sub Committees of Board of Directors

The Board Committees focus on specific areas and make informed decisions within the authority delegated. Each Committee of the Board is guided by its Charter, which defines the composition, scope and powers of the Committee. The Committees also make specific recommendations to the Board on various matters from time-to time. All observations, recommendations and decisions of the Committees are placed before the Board for information or for approval.

The Company has Three Board-level Committees, namely:

Audit Committee.

Shareholders Grievance Committee.

Remuneration Committee.

Audit Committee

The management is responsible for the Company’s internal controls and the financial reporting process while the statutory auditors are responsible for performing Independent audits of the Company’s financial statements in accordance with generally accepted auditing practices and for issuing reports based on such audits. The Board of Directors has entrusted the Audit Committee to supervise these processes and thus ensure accurate and timely disclosures that maintain the transparency, integrity and quality of financial control and reporting. The primary responsibilities of the Audit Committee are to:

Supervise the financial reporting process,

Review the quarterly and annual financial results before placing them to the Board along with related disclosures and filing requirements,

Review the adequacy of internal controls in the Company, including the plan, scope and performance of the internal audit function,

Discuss with management the Company’s major policies with respect to risk assessment and risk management,

Hold discussions with Statutory Auditors on the nature and scope of audits and any views that they have about the financial control and reporting processes,

Ensure compliance with accounting standards and with listing requirements with respect to the financial statements,

Recommend the appointment and removal of Statutory Auditors and their fees,

Recommend the appointment and removal of Internal Auditors and their fees,

Review the independence of Auditors,

Ensure that adequate safeguards have been taken for legal compliance both for the Company and its other Indian as well as foreign subsidiaries,

Review of related party transactions.

The Statutory Auditors, Internal Auditors and the Chief Financial Officer of the Company are invited to attend and participate at meetings of the Committee.

The Chairman of the Audit Committee Shri Anant Sagar Awasthi attended the last Annual General Meeting held on 23rd August, 2010.

M/s Patel Madan Malpani & Co., M/s Ekbote Deshmukh & Co., M/s B.K Banka & Associates were the firms those performed the Internal Audit function of the Solar Group for the FY 2010-11.

The Company Secretary Mrs. Khushboo A. Pasari acts as the Secretary to the Audit Committee.



Meetings during the year

The meetings of the Audit Committee were held on 24th May,

2010, 29th July, 2010, 29th October, 2010, 18th January,

2011 & 3rd March, 2011.The gap between any two meetings

has been less then four months.

Composition and Attendance

The Audit Committee consists of one Executive & three Non-

Executive members, Chairman being Independent Director.

Table 4: Composition and Attendance of Audit Committee

as on 31st March, 2011

Serial No.

Name of Director Designation Number of meetings attended

1. Anant Sagar Awasthi Chairman 5/5

2. Satish Chander Gupta Member 4/5

3. Dilip Patel Member 4/5

4. Manish Nuwal Member 5/5

Risk Management

The Explosive business has a specific set of risk characteristics

which need to be carefully evaluated managed and mitigated,

in order to effectively manage the cyclic nature of demand;

the management has adopted an internal risk management

protocol. Risk management covers the entire process of business

including inter-alia capital investment, technology development

and customer acquisition/ retention.

There are continuous concerns on input cost increase due to

commodity price movements, the Company is taking steps to

competitively procure its raw material through global sourcing

and appropriate inventory management.

We have included a separate section on Risk Management

under Management Discussion and Analysis.

Management Development

The Management’s Discussion and Analysis on Company’s

performance – industry trends and other material changes with

respect to the Company and its subsidiaries, wherever applicable

are presented on pages 36 to 39 of the Annual Report.

Remuneration Committee

Though this is a non-mandatory requirement, the Board of

Directors has constituted a Remuneration Committee with

3 Non-Executive Directors of which all 3 are independent

including its Chairman. Its principal scope/ role is to

recommend remuneration package for Executive Directors/

Senior management personnel as and when required.

The Committee accordingly meets only as per needs. Only one

meeting on 24th May, 2010 of Remuneration Committee was

held during the FY 2010-11. Its composition and attendance is given hereunder:

Table 5: Composition and attendance of Remuneration Committee as on 31st March, 2011

Serial No.

Name of Director Capacity No. of Meetings held No. of Meetings Attended

1. Anant Sagar Awasthi Chairman 1 1

2. Satish Chander Gupta Member 1 1

3. Dilip Patel Member 1 1


Remuneration Policy for Directors

Executive Directors Remuneration

The remuneration package of the Executive Directors is normally fixed on 3/5 years service contract basis, by the Remuneration Committee.

Table 6 provides the remuneration paid to the Executive Directors for the services rendered during the FY 2010-11.

Non-Executive Independent Directors Remuneration

All the five Non-Executive Directors are, Independent Directors i.e. independent of management and free from any business or other relationship that could materially influence their judgment. All the independent directors satisfy the criteria of independence as defined under listing agreement with Indian Stock Exchanges.

Non-Executive Independent Directors were paid revised sitting fees of Rs. 20,000 and Rs. 10,000 respectively for attending Board and Board Committee meetings for the FY 2010-11. This was decided by Board of Directors at their meeting held on 24th May, 2010 hence based on their attendance at Board & Committee Meetings they were paid sitting fees.

Table 7 provides the remuneration paid to the Non-Executive Independent Directors for the services rendered during the FY 2010-11.

The Company does not have stock option programme.

None of the Non-Executive Directors held any shares in the Company.

Table 6: Remuneration paid to Executive Directors during the FY 2010-11

(Rs. in Lacs)

Serial No.

Executive Directors Relationship with other Directors Salary Commission Perquisites andAllowances

1. Satyanarayan Nuwal Brother of K.C Nuwal/Father of Manish Nuwal 60.00 78.00 –

2. Kailashchandra Nuwal Brother of S. N Nuwal/ uncle of Manish Nuwal 60.00 78.00 –

3. Manish Nuwal Son of S.N Nuwal/ Nephew of K.C Nuwal 60.00 78.00 –

4. Kundan Singh Talesra – 13.20 – –

5. Roomie Dara Vakil – 15.60 – –

Table 7: Remuneration paid to Non-Executive Directors during the FY 2010-11

(Rs.)

Serial No.

Non-Executive Directors Sitting Fees

1. Anant Sagar Awasthi 1,50,000

2. Satish Chander Gupta 1,20,000

3. Dilip Patel 1,20,000

4. Rishi Narain Singh 40,000

5. Ajai Nigam 80,000

6. Anand Kumar 40,000

Note: The above figures are inclusive of fees paid for attendance of committee meetings

Shareholders Grievance Committee

The Board has constituted an Shareholders Grievance Committee. Its role and responsibility is to expeditiously process and approve transactions in securities, complying with SEBI regulations and listing requirements and redressal of investor grievances. The Committee oversees and monitors the performance of the Registrar & Transfer Agents and devises measures for overall improvement in the quality of investor services.

The Committee comprises of 3 Directors, out of which 2 are Executive Directors. The Chairman of the Committee is a Non-Executive Director. The Committee has met 5 times during the year on 24th May, 2010, 29th July, 2010, 29th October, 2010,18th January, 2011 & 3rd March, 2011. During the FY 2010-11 its composition and attendance is given hereunder:



Table 8: Composition and attendance of Investor Grievance Committee as on 31st March, 2011

Serial No.

Name of Director Capacity No. of Meetings held

No. of Meetings Attended

1. Anant Sagar Awasthi Chairman 5 5

2. Kailashchandra Nuwal Member 5 3

3. Kunadan Singh Talesra Member 5 4

Nature of complaints and redressal statusDuring the past financial year, the complaints received by us were general in nature, which include issues relating to the change of address, non-receipt of shares, refund orders etc. All these complaints/queries were resolved to the satisfaction of investors.

Table 9: Nature of Complaints and redressal status as on 31st March, 2011

Sr. No.

Nature of Complaint Complaints Received

Complaints Processed

Complaints Pending

1. Non Receipt of Dividend warrant 7 7 0

2. Non receipt of Annual Report 1 1 0

3. Others 1 1 0

Committee MinutesMinutes of all the Committees of the Board are prepared by the Secretary of the Company, approved by the Chairman of the Meeting, circulated to the Board in the Agenda for the succeeding meeting and recorded thereat.

Reconciliation of Share Capital AuditA qualified practicing Company Secretary Shri Aniket Devdhar has carried out Share Capital Audit every quarter to reconcile the total admitted capital with National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) and the total issued and listed capital. The audit confirms that the total issued/paid up capital is in agreement with the aggregate total number of shares in physical form, shares allotted & advised for demat credit but pending execution and the total number of dematerialised shares held with NSDL and CDSL.

Third Layer Governance By Shareholders

a) General Body Meetings

Table 10: Information of last three Annual General Meetings (AGMs) held:

Year Location Date & Time Special Resolution

15th AGM-2010 Hotel Tuli International, Residency Road, Sadar Nagpur - 440001

23rd August, 2010 at 11.30 a.m NIL

14th AGM-2009 Hotel Tuli International, Residency Road, Sadar Nagpur - 440001

17th September, 2009 at 11.30 a.m 3

13th AGM-2008 Udyog Bhavan, First floor, Civil Lines, Nagpur – 440001

24th September, 2008 at 11.00 a.m. 4

b) Whether Special resolutions were put through Postal Ballot last year? YES


c) Are Special resolutions proposed to be put through Postal Ballot this Year? NO

d) During the year under review, the Company has not conducted the postal ballot process.

e) No Extraordinary General Meeting of the Members was held during the year.

Means of CommunicationQuarterly Results

Quarterly results are published in numerous leading dailies such as, The Economic Times (Mumbai Edition), Financial Express (All Editions), and Loksatta (Nagpur Edition). All financial and other vital official news are also communicated to the concerned stock exchanges and are posted on the website www.solarexplosives.com

Presentations to Institutional investors or analysts

During FY 2010-11, presentations made to institutional investors or analysts by Solar Industries India Limited are displayed on the Company’s website www.solarexplosives.com

Company’s Corporate Website

The Company’s website is a comprehensive reference onSolar Industries India Limited’s management, vision, mission, policies, Corporate Governance, corporate sustainability, investor relations etc.

The section on investor relations serves to inform the shareholders, by giving complete financial details, shareholding patterns, corporate benefits, information relating to stock exchanges registrars and Share transfer Agents.

Annual Report:

Annual Report containing, inter alia, Audited Annual Accounts, Consolidated Financial Statements, Director’s Report, Auditor’s Report and other important information is circulated to members and others entitled thereto. The Management Discussion and Analysis (MD&A) Reports forms part of the Annual Reports and is displayed on the Company’s website www.solarexplosives.com.

Chairman’s Communique:

Printed copy of the Chairmen’s Speech is distributed to the entire shareholder’s at the Annual General Meeting. The same is also placed on the website www.solarexplosives.com.

Designated Exclusive email-id:

The Company has designated the following email-id exclusively for investor servicing. [email protected]

Green Initiative in the Corporate Governance:

Ministry of Corporate Affairs as a ‘Green Initiative in the Corporate Governance’ has issued a Circular no 17/2011 on 21 April 2011, permitting companies to service delivery of documents electronically on the registered members/shareholders email addresses under section 53 of the Companies Act, 1956. The company is accordingly proposing to send documents, such as Notice calling the general meeting, audited financial statements, director’s report, auditor’s report etc in electronic form on the email id’s provided by the shareholders & made available by them to the company through the depositories. Shareholders desiring to receive the said documents in physical form will continue to get the same in physical form.

General Shareholder Information

1. Annual General Meeting

Annual General meeting for the FY 2010-11 is scheduled on Wednesday the 10th day of August, 2011. The meeting will be conducted at Hotel Tuli Imperial, Central Bazar Ramdaspeth, Nagpur-440 010.

For those of you, who cannot make it to the meeting, please remember that you can appoint a proxy to represent you in the meeting. For this you need to fill in a proxy form and send it to us.

The last date for receipt of proxy forms by us is 8th August, 2011 before 12.30 p.m.

2. Financial Calendar

Our Tentative calendar for declaration of results for the FY 2011-12 is given below

Table 11: Financial results schedule for the FY 2011-12

Particulars Tentative Schedule

Financial Reporting for the Quarter ending 30th June, 2011 Second fortnight of July 2011

Financial Reporting for the Quarter ending 30th September, 2011 Second fortnight of October, 2011

Financial Reporting for the Quarter ending 31st December, 2011 Second fortnight of January, 2012

Financial Reporting for the Year/Quarter ending 31st March, 2012 On or before 30th May, 2012

Annual General meeting for the Year ending 31st March, 2012 August, 2012

For the year ended on 31st March, 2011 results were announced on 19th May, 2011.

For the Quarter ended on 30th June, 2011 results were announced on 27th July, 2011.



3. Dates of Book Closure

2nd August, 2011 to 10th August, 2011 (both days

inclusive).

4. Dividend:

The Board of Directors of the Company has proposed

a dividend at 40% for the financial year ended on

31st March, 2011 subject to the approval by the shareholders

of the Company at the Annual General Meeting.

The payment of dividend, upon declaration by the

shareholders at the forthcoming Annual General Meeting,

will be made on or after 16th August, 2011:

1) To all those Beneficiaries holding shares in electronic

form, as per the ownership data made available to the

Company by National Securities Depository Limited

(NSDL) and Central Depository Services (India) Limited

(CDSL) as at end of the day on 1st August, 2011.

2) To all those shareholders holding shares in physical

form, after giving effects to all the valid share transfers

lodged with the Company on or before the closing hours

on 1st August, 2011.

Shareholders are advised to refer to the notice of the

Annual General Meeting for details of action required to

be taken by them in this regard.

5. Listing on Stock Exchanges

Shares of Solar Industries India Limited are currently listed on the following Stock Exchanges

Table 12: Listing Details

SerialNo.

Name of Stock Exchange Address

1. Bombay Stock Exchange Limited, Mumbai (BSE) Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai – 400 0012. National Stock Exchange of India Limited, Mumbai (NSE) Exchange plaza, Bandra Kurla Complex, Bandra (E),

Mumbai – 400 051

Solar Industries India Limited has paid Listing fees to both the above stock exchanges in full.

6. Stock Code

Bombay Stock Exchange Limited, Mumbai : 532725

National Stock Exchange of India Limited, Mumbai : SOLARINDS

ISIN : INE343H01011

7. Market Price Data

The shares of the Company were listed on NSE and BSE on 3rd April, 2006 share price data from 1st April, 2010 to31st March, 2011 is as follows:

Table 13: Market Price data of Solar Industries India Limited

MonthsBombay Stock Exchange National Stock Exchange

Share Price Sensex Points Share Price S & P Cnx Nifty PointsHigh Low High Low High Low High Low

April 467.90 392.55 18047.86 17276.80 466.95 398.00 5388.65 5160.90May 459.95 365.10 17536.86 15960.15 487.90 366.15 5278.70 4786.45June 450.00 395.00 17919.62 16318.39 428.70 396.00 5366.75 4961.05July 433.90 405.70 18237.56 17395.58 435.00 337.00 5466.25 5225.60August 469.65 415.50 18475.27 17819.99 480.00 420.20 5549.80 5348.90September 539.85 440.00 20267.98 18027.12 540.00 438.80 6073.50 5403.05October 539.80 490.00 20854.55 19768.96 540.00 485.00 6284.10 5937.10November 700.00 530.80 21108.64 18954.82 643.00 530.00 6338.50 5690.35December 673.95 548.10 20552.03 19074.57 670.00 541.00 6147.30 5721.15January 580.00 535.00 20664.80 18038.48 585.00 506.05 6181.05 5416.65February 650.00 517.00 18690.97 17295.62 588.00 520.00 5599.25 5177.70March 619.90 545.50 19575.16 17792.17 615.00 567.05 5872.00 5348.20


8. Registrar and Share Transfer Agent

Link Intime India Pvt. Ltd.LBS Marg, Bhandup (W),Mumbai – 400 078Tel: (+91-22) 25963838Fax: (+91-22) 25946969Website: www.linkintime.co.inEmail: [email protected]

9. Share Transfer System

Share transfer and related operations for the Company, is conducted by Link Intime India Pvt. Ltd which is registered with SEBI as a Category 1 registrar. Share transfer is normally affected within maximum period of 30 days from the date of receipt, if all the required documents are submitted.

10. Distribution of shares and shareholding pattern as on 31st March, 2011

Table 14: Shareholding pattern as on 31st March, 2011

Shareholding of nominal value No. of share holders

% of total Number of shareholders

Shares held in each class

Nominal Value of shares

% of total

1 – 5000 4882 98.7260 538050 3.1058 5001 – 10000 18 0.3640 115502 0.6667 10001 – 20000 13 0.2629 178906 1.0327 20001 – 30000 2 0.0404 48388 0.2793 30001 – 40000 3 0.0607 114294 0.6598 40001 – 50000 3 0.0607 150000 0.8659 50001 – 100000 5 0.1011 335154 1.9346 100001 – ***** 19 0.3842 15843522 91.4552

Total 4945 100.00 17323816 100.00

Table 15: Shareholding Pattern (Category wise) as on 31st March, 2011

Serial No.

Category No. ofShareholders

Total Shares % of Total Share holding

1. Promoters 14 12923816 74.602. Resident Individuals(public) 4674 900423 5.19763. Foreign Institutional Investors 4 62248 0.35934. Trust 2 200 0.00125. Mutual Funds 12 2576318 14.87156. Clearing Members 28 13412 0.07747. Other Bodies Corporate 108 806381 4.65488. Non Resident Indians 103 41018 0.2368

Total 4945 17323816 100.00

11. Dematerialisation of Shares and liquidity

The Company’s shares are compulsorily traded in dematerialised form and are available for trading on both the Depositories in India viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).

17323803 Ordinary Shares of the Company representing 99.99% of the Company’s share capital is dematerialised.

As per SEBI circular dated April 24, 2009 bearing reference no. SEBI/CFD/DIL/LA/1/2009/24/04 Company opened and maintained separate Unclaimed Securities Suspense Account with LKP Securities Limited, Mumbai to hold allotted shares which were not credited to allottees account during the Initial Public Offer. Table 16 shows the details of such allottes.



Company also opened and maintained separate account with State Bank of India, Nagpur, to hold dividend due on shares lying in Dividend Escrow Account of Company.

Table 16: Details of shares lying in Unclaimed Securities Suspense Account of SIIL

Serial No.

Applno Name DP/CLITID ALLOT

1. 2272861 Champaklal U Sanghvi 13015400000 302. 5932548 M Anantham – 303. 1461449 Navin Bareja IN30261932504258 524. 3629081 Pradeep M Shah 1302240000026644 375. 5331319 Saroj Agarwal IN30047672338419 37

Total 186

Table 17: Major 10 Shareholders as on 31st March, 2011 (Other than promoters)

Serial No.

Name Holding %

1. HDFC Trustee Co. Ltd. A/c HDFC Growth Fund 9,33,257 5.38712. ICICI Prudential Life Insurance Co. Ltd. 6,26,913 3.61883. HDFC Trustee Co. Ltd. A/c HDFC Mid-Cap Oppurtunities Fund 5,83,180 3.36634. Birla Sun Life Trustee Co. Pvt. Ltd. A/c Birla Sun Life Midcap Fund 5,55,160 3.20465. Reliance Capital Trustee Co. Ltd. A/c Reliance Small Cap Fund 1,21,750 0.70286. ICICI Prudential Emerging Star (Stock Targeted at Returns) Fund 1,04,509 0.60337. Birla Sun Life Trustee Co. Pvt. Ltd. A/c Birla Sun Life Special Situations Fund 62,896 0.36318. HDFC Trustee Co. Ltd. A/c HDFC Balanced Fund 50,000 0.28869. HDFC Trustee Co. Ltd. HDFC MF Monthly Income Plan Short Term Plan 50,000 0.288610. Birla Sun Life Trustee Co. Pvt. Ltd. A/c Birla Sun Life Small and Midcap Fund 50,000 0.2886

Total 31,37,665 18.1118

12. Plant Locations as on 19th May, 2011

Table 18: Plant Locations as on 19th May, 2011

SerialNo.

Address City

1. Village-Chakdoh (Bazargaon), Tehsil-Katol Nagpur, Maharashtra2. Village-Savanga Nagpur, Maharashtra3. Village-Khapri (Nimji), Gondkheri-Kalmeshwar Road, Tahsil-Kalmeshwar, Nagpur, Maharashtra.4. Plot No. 32-37, Udyog Deep Ind.Area, , Dist.-Sidhi, Waidhan , Madhya Pradesh5. Survey No.101, Warur Road, Tahsil-Rajura, Chandrapur, Maharashtra.6. Kh. No.5 Village-Mudapur, Tahsil-katgora, Korba, Chattisgarh.7. Plot No. 967 & 1156, Mouza Manua, Tahsil-Ramgarh Cant., Hazribagh, Jharkhand.8. MIDC Plot No. B-11, Chandrapur (Tadali) Growth Center, Chandrapur Maharashtra.9. Kandra Industrial Area, plot No. C-32 (p) & C-33 (p), Dhanbad, Jharkhand.10. Mouza Barakuria, Plot No. 2/848, P.S.Asansol (North), Tahsil-Asansol, Burdwan, West Bengal.11. IDCO Plot No.27, Revenue Plot No.48(P), Village Ghontapada Industrial Estate Talcher, Angul, Orissa.12. KH. No.323/2, P.H.No.30, Mauza Chainpur, Tahsil-Manendragarh, Koria, Chattisgarh.13. Survey No.363, Kamanpur (mandal), Village Musthyala (A) Karimnagar, Andra Pradesh14. Mauza Behrapalli,Plot No: 389 & 392, Jharsuguda, Orissa15. Plot No.380(p),Khata no. 48Mauza Borghatta P.O west Bokaro, Dist Ramgarh16. Khasra No.975/2, Ganyar Dist. Singrauli (M.P)17. Khasra No.1459 &1460, Village Rupaheli Tahesil Harda, Dist Bhilwara


13. Address for correspondence

Investors and shareholders can correspond with the registered office of the Company at following address:

The Compliance Officer/Company SecretarySolar Industries India Limited11, Zade Layout,Bharat Nagar,Nagpur, MaharashtraTel: (0712) 2561000, 2561010Fax: (0712) 2560202Email: [email protected]

Fourth Layer Governance of Management Process

Listing Agreement Compliances.Your Company is compliant with all the mandatory provisions of clause 49 of Listing Agreement and is committed to ensure compliance with amendments that may be proposed. The details of these Compliances have been given in relevant sections of this Report.

Compliance on Matters Related to Capital MarketsWe have complied with the requirements of the Stock Exchanges and SEBI on matters related to Capital Markets, as applicable.

Compliance Report on Non-Mandatory Requirements Under Clause 49

1. The Board - Chairman’s Office and tenure of Independent Directors

The Chairman of Solar Industries India Limited is an Executive Director and this provision is not applicable to Solar Industries India Limited. Company has prescribed Corporate Governance guidelines and ensures that the person who is being appointed as an Independent Director has the requisite qualification and experience which would be of use to the Company and which, in the opinion of the Company, would enable him to contribute effectively to the Company in his capacity as an Independent Director.

2. Remuneration Committee

The Board of Directors constituted Remuneration Committee, which is entirely composed of Independent Directors. The Committee also discharges the duties and responsibilities as described under non-mandatory requirements of the Clause 49. The details of the Remuneration Committee and its powers have been discussed in this Section of theAnnual Report.

3. Shareholders rights

We display our quarterly, half yearly and yearly results on our web site, www.solarexplosives.com and also publish our results in widely circulated newspapers. We have not sent half yearly results to the shareholders in the FY 2010-11.

4. Audit Qualifications

The Auditors have not qualified the financial statements of the Company.

5. Disclosures by the Management

The Company has not entered into any transaction of material nature with the Promoters, the Directors or the Management, their subsidiaries or relatives, etc. that may have any potential conflict with the interests of the Company.

6. Warning against Insider Trading

Comprehensive guidelines in accordance with the SEBI Regulations in this regard, advising and cautioning the management, staff and other relevant business associates on the procedure to be followed while dealing with the securities of SIIL, are in place. The code of conduct and corporate disclosure practices framed by the Company helped in ensuring compliance with requirement.

Secretarial Standards ComplianceYour Company is in substantial compliant with the Secretarial Standards issued by the Institute of Company Secretaries of India.

CEO/CFO CertificationThe CEO/CFO of the Company have certified positively to the Board on the matters specified under Clause 49(V) of the Listing Agreement. The said certificate is attached in this Annual Report.

Auditor’s Certificate on Corporate GovernanceThe Company obtained the certificate from the auditors of the Company regarding compliance with the provisions relating to the Corporate Governance laid down in Clause 49 of the Listing Agreement with the stock exchanges. This report is annexed to the Director’s Report for the FY 2010-11, and will be sent to the stock exchanges along with this Annual Report to be filled by the Company.



Declaration by Shri Manish Nuwal

Certificate by Chief Executive Officer (CEO) and Chief Financial Officer (CFO):

I, Manish Nuwal, Executive Director of Solar Industries India Limited hereby confirm pursuant to clause 49(1) (D) of the Listing agreement, that:

The Board of Directors of SIIL has laid down a code of conduct for all the Board members and senior management of the Company. The said code of conduct has also been posted on Company’s website www.solarexplosives.com.

All the Board members and senior management personnel have affirmed their compliance with the said code of conduct for the year ended on 31st March, 2011.

For Solar Industries India Limited

(Manish Nuwal) Director

We, Kundan Singh Talesra, Chief Executive Officer and Nilesh Panpaliya, Chief Financial Officer of Solar Industries India Limited, certify:

1. That we have reviewed the financial statements and the cash flow statements for the year ended 31st March, 2011 and that to the best of our knowledge and belief:

These statements do not contain any materially untrue statement nor omit any material fact nor contain statements that might be misleading, and

These statements present a true and fair view of the Company’s affairs and are in compliance with the existing accounting standards, applicable laws and regulations.

2. That there are, to the best of our knowledge and belief, no transactions entered into by the Company during the year, which are fraudulent, illegal or violative of the Company’s code of conduct;

3. That we accept responsibility for establishing and maintaining internal controls, we have evaluated the effectiveness of the internal control systems of the Company and we have disclosed to the auditors and the audit committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps that we have or propose to take to rectify the identified deficiencies and

4. That we have informed the auditors and audit committee of:

i. significant changes in internal control during the year;

ii. significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

iii. instances of significant fraud of which we have become aware and the involvements therein, if an, of the management or an employee having a significant role in the Company’s internal control system.

For Solar Industries India Limited

(Kundan Singh Talesra) (Nilesh Panpaliya) Chief Executive Officer Chief Financial Officer

Dated: 19th May, 2011


Certificate by the Auditors on Corporate Governance

To the members of

Solar Industries India Limited

We have reviewed the records concerning the Company’s compliance of the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement entered into by the Company with the Stock Exchanges of India for the financial year ended on 31st March, 2011.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our review was limited to procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the Corporate Governance. It is neither an audit nor an expression of an opinion on the financial statements of the Company.

We have conducted our review on the basis of the relevant records and documents maintained by the Company and furnished to us for examinations and information and explanation given to us by the Company.

Based on such a review, and to the best of our information and according to the explanations given to us, in our opinion, the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchanges of India.

We further state that such compliance is neither an assurance as to the future viability of the Company nor to the efficiency with which the management has conducted the affairs of the Company.

For and on behalf of

Gandhi Rathi CoChartered Accountants

(C.N.Rathi)PartnerM.No. 39895



AUDITOR’S REPORT TO THE MEMBERS OF SOLAR INDUSTRIES INDIA LIMITED

1. We have audited the attached Balance Sheet of Solar Industries India Limited as at 31st March 2011, the Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we report that :

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

(e) According to the information and explanations given to us and on the basis of written representations from Directors taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st March 2011 from being appointed as director under Section 274(1) (g) of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanations given to us, and subject to our notes/observations brought out elsewhere in the report, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true a fair view in conformity with the accounting principles generally accepted in India.

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

(b) in the case of the Profit and Loss Account of the Profit for the year ended on that date.

(c) in the case of Cash Flow Statement, of the Cash flows for the year ended on that date.

FOR GANDHI RATHI & CO.,CHARTERED ACCOUNTANTS

(C.N.RATHI)PARTNER

PLACE : NAGPUR M. No. 39895DATED : 19th May, 2011 Firm Reg. No. 103031W


ANNEXURE ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT TO THE MEMBERS OF SOLAR INDUSTRIES INDIA LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2011

i) a) The Company has maintained proper records showing full particulars including quantitative details and location of its fixed assets.

b) The Management has physically verified the fixed assets at reasonable intervals and no material discrepancies are reported to have been observed on such verification as compared to book records.

c) As per the information and explanation given to us on our enquiries the disposal of assets during the year was not substantial so as to have an impact on the operations of the Company, or affect its going concern.

ii) a) The stocks of finished goods, work in process, stores, spare parts and raw materials have been physically verified by the Management during the year. In our opinion, the frequency of the verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of the stocks followed by the Management were found reasonable and adequate in relation the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the company is maintaining proper records of inventory and the discrepancies noticed on verification between the physical stocks and the book stocks were not material in relation to the operations of the Company.

iii) a) The Company has granted loan to companies covered in the register maintained under section 301 of the Companies Act, 1956, and the yearend balance of loan granted to such Companies was Rs. 7956.62 Lacs.

b) In our opinion, the rate of interest and other terms and conditions of such loan are prima facie not prejudicial to the interest of the Company.

c) The Company has repaid the principal amounts as stipulated and has been regular in the payment of interest.

d) There is no overdue amount of such loan granted to aforesaid company.

e) The Company has taken loan from companies covered in the register maintained under section 301 of the Act, and the yearend balance of loans taken from such Companies was Rs. 1137.02 Lacs.

f) In our opinion, the rate of interest and other terms and conditions of loans taken by the Company are prima facie not prejudicial to the interest of the Company.

g) The Company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and for the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v) a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Sec. 301 of the Act have been entered in the register maintained under that section.

b) In our opinion and according to the information and explanation given to us, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted fixed deposits from the public and consequently, the directives issued by the Reserve Bank of India; the provisions of Sections 58A, 58AA or any other relevant provisions of Act and the rules framed there under are not applicable.

vii) In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

viii) According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of goods manufactured by the Company.

ix) a) According to the information and explanations given to us and according to the records of the Company, the Company is regular in depositing undisputed statutory dues including Provident Fund, Income-tax, and Sales - tax, Service Tax, Excise Duty, Cess and any other statutory dues with the appropriate authorities. However, there are no arrears of such dues as at the close of the year concerned for a period of more than six months from the date they become payable.



ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT TO THE MEMBERS OF SOLAR INDUSTRIES INDIA LIMITED

b) According to the information and explanation given to us, the dues of sales tax, income tax, customs, wealth tax, excise duty, cess which have not been deposited on account of disputes and the forum where the dispute is pending are as follows :-

Name of the statute

Nature of dues / demands Amt (Rs. in Lacs)

Forum where dispute is pending

Central Excise Act

Excise duty on to and fro freight collected on account of sales made to CIL subsidiaries treating it as additional consideration

8 4.49 CESTAT

Excise duty on the benefits earned by the company due to premature payment of sales tax deferral liability

146.26 Commissioner (Appeals)

Excise Duty on assessable value of goods used in in-house testing 12.87 Supreme CourtCenvat Credit of Service tax paid on tour operator services 4.54 Commissioner

(Appeals)Cenvat Credit of Service tax paid on workmen compensation 7.19 Commissioner

(Appeals)Cenvat Credit of Service tax paid on outward transportation availed as credit

6.35 Commissioner (Appeals)

Sales Tax Act

Sales Tax on A.N.sale,Input Credit,CST liability on non submission of ‘c’ form & Entry Tax liability

85.87 M.P.Commercial Tax Appellate Board

The Company neither has accumulated losses at the end of the financial year, nor incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution and bank.

xii) According to the information and explanations given to us the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

xiv) The Company has maintained proper records of the transactions and contracts in respect of dealing of trading in shares, securities and other investments and timely entries have been made therein. All shares, securities and other investments have been held by the company in its own name.

xv) In our opinion, the terms and conditions on which the Company has given guarantees for loans taken by others from banks or financial institutions are not prejudicial to the interest of the Company.

xvi) To the best of our knowledge and belief and according to the information and explanations given to us, term loan availed by the Company were, prima facie, applied by the Company for the purposes for which the loans were obtained.

xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the no funds raised on short-term basis have been used for long-term investment.

xviii) The Company has not made preferential allotment of shares during the year.

xix) No debentures have been issued by the Company to create securities or charge.

xx) The Company has not raised any money by public issue during the year.

xxi) According to the information and explanations given to us no fraud on or by the Company has been noticed or reported during the course of our audit.

FOR GANDHI RATHI & CO.CHARTERED ACCOUNTANTS

PLACE: NAGPURDATED : 19th May, 2011 (C.N. RATHI) PARTNER

M. No. 39895Firm Reg. No. 103031W


Amount in Rs. Lacs

Particulars ScheduleAS AT

31st March, 2011AS AT

31st March, 2010

SOURCES OF FUNDS Share Holders’ FundShare Capital A 1732.38 1732.38 Reserves and Surplus B 21024.52 17499.64 22756.90 19232.02 Loan FundsSecured Loans C 9680.64 7664.09 Unsecured Loans D 4036.52 2594.63 13717.16 10258.72

Deferred Tax Liability 1221.77 1019.25

Grand Total 37695.83 30509.99

APPLICATION OF FUNDSFixed Assets EGross Block 15353.94 11541.69 Less: Depreciation 3305.91 2692.78 Net Block 12048.03 8848.91 Capital Work-In-Progress 1624.46 1580.70 Net Fixed Assets 13672.49 10429.61

Investments F 6915.71 3562.38

Current Assets, Loans & AdvancesInventories G 2649.48 3156.66 Debtors and Other Debit Balances H 7797.45 7610.70 Cash and Bank Balances I 4157.19 7381.46 Loans and Advances J 13153.24 12892.81 27757.36 31041.63 Less: CURRENT LIABILITIES & PROVISIONS K 10821.50 14688.42 Net Current Assets 16935.86 16353.21

MISCELLANEOUS EXPENDITURE 171.77 164.79 ( To The Extent Not Written Off )

171.77 164.79

Grand Total 37695.83 30509.99


Notes on Accounts as per scheduleAs per our Report of even date annexedFor Gandhi Rathi & Co., For And On Behalf Of The BoardChartered Accountants S.N.Nuwal Manish Nuwal

Director DirectorC.N. RathiPartnerM. No. 39895 Khushboo PasariFirm Reg No. 103031W Company Secretary

Balance Sheet as at 31st March, 2011

Solar Industries India Limited(Cartridge, Accessories & Bulk Division)



Profit And Loss Account for the year ended 31st March, 2011

Amount in Rs. Lacs

Particulars ScheduleFOR THE

YEAR ENDED 31st March, 2011

FOR THE YEAR ENDED

31st March, 2010INCOMESales L 56767.45 50185.51 Less: Excise Duty 3646.01 2583.36

53121.44 47602.15 Other Income M 2731.68 2501.33

TOTAL 55853.12 50103.48

EXPENDITUREOperating Expenses N+O+P 46512.32 43351.37 Depreciation E 663.55 632.00 Interest and Finance Charges Q 1106.46 1201.04

TOTAL 48282.33 45184.41

PROFIT BEFORE TAXATION 7570.79 4919.07

Provision for TaxCurrent Tax 2309.30 1687.39 Deferred Tax 202.52 132.33 Prior Period Taxes 29.62 -27.17

2541.44 1792.55

PROFIT AFTER TAXATION 5029.35 3126.53 Balance Brought Forward 3513.50 2805.73 BALANCE AVAILABLE FOR APPROPRIATION 8542.85 5932.26

APPROPRIATIONInterim Dividend 692.95 606.33 Proposed Dividend 692.95 606.33 Tax on Dividend 118.57 206.10 General Reserve 1500.00 1000.00 BALANCE C/F TO BALANCE SHEET 5538.38 3513.50

Basic Earnings Per Share Rs. 29.03 18.05

(See Note 2)





Cash Flow Statement for the year ended on 31st March, 2011

Amount in Rs. Lacs

PARTICULARS FY 2010-11

FY 2009-10

A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax 7570.79 4919.08 Adjustments for : Depreciation 663.55 632.00 Interest Expense 1106.46 1201.04

1770.01 1833.04Operating Profit before working Capital Changes 9340.80 6752.12 (Increase)/Decrease in Sundry Debtors -186.76 1207.93 (Increase)/Decrease in Inventories 507.18 -1138.55 (Increase)/Decrease in Loans & Advances -260.43 -2016.01 Increase/(Decrease) in Current Liability -3866.91 825.99

-3806.92 -1120.64Cash Generated from Operations 5533.88 5631.48 Deferred Tax 202.52 132.33 Income Tax Paid 2309.30 1687.39 Prior period tax 29.62 -27.17

2541.44 1792.55Net Cash from Operating Activities 2992.44 3838.93B. Cash Flow From Investing Activities Increase in Fixed Assets -3937.03 -2009.74 Sale of Fixed Asset 30.60 0.00 Increase in pre op Exp -6.98 -58.07 Increase (+) in Investment -3353.33 -1071.33Net Cash from Investing Activities -7266.74 -3139.14C. Cash Flow From Financing Activities Changes in Working Capital Loan 6547.78 3823.65 Repayment of Commercial Paper -2500.00 0.00 Repayment of vehicle Loan -31.21 0.00 Decreases in Unsecured loans -558.11 -1488.05 Proposed Dividend -692.95 -606.33 Interim Dividend -692.95 -606.33 Interest -1106.46 -1201.04 Deferred Tax 202.52 132.33 Tax on Dividend -118.57 -206.09Net Cash from Financing Activities 1050.03 -151.86Net Increase in Cash & Cash equivalents -3224.27 547.93

Notes : 1) Cash & Cash equivalents at the beginning of period 7381.46 6833.53 Cash & Cash equivalents at the end of period 4157.19 7381.46

-3224.27 547.932) The above cash flow statement has been prepared in accordance with the requirements of Accounting Standard 3 “ Cash Flow

Statement “ issued by the Institute of Chartered Accountants of India.






Schedule forming part of the accounts for the year ended 31st March, 2011

Amount in Rs. Lacs

SCHEDULES 31st March, 2011 31st March, 2010

SCHEDULE ‘A’

SHARE CAPITAL

Authorised Share Capital

27000000 Equity Shares of Rs. 10/- each 2700.00 2700.00

Issued, Subscribed & Paid up


1732.38 1732.38

Amount in Rs. Lacs


SCHEDULE ‘B’

RESERVES AND SURPLUS

General Reserve 6160.83 4660.83 Profit & Loss Account (SCL) on Merger 1106.03 1106.03 Profit & Loss Account 5538.38 3513.50

Capital ReserveShare Premium 7790.33 7790.33 Capital Reserve on Merger 408.95 408.95 State Capital Incentive 20.00 20.00

21024.52 17499.64


Schedule forming part of the accounts for the year ended 31st March, 2011 (Contd.)

Amount in Rs. Lacs


SCHEDULE ‘C’

SECURED LOANS

Cash Credit - State Bank Of India, IFB 423.67 0.00 Bank of India - Cash Credit 376.08 106.74 BOI OD Against FDR 1315.31 0.00 HSBC Export Packing Credit 893.82 0.00 Axis Bank - WCDL 1371.86 0.00 Standard Chartered Bank - Export Packing Credit 1180.67 906.90 Hypothecation Of Stocks Of Raw Materials, Finished Goods, Goods in Process, Stores, Receivables and Other Current Assets, & Second Charge On Fixed Assets Of The Company.

Term Loan - Development Bank Of Singapore 4119.23 4119.23 (On tangible , Movable & Immovable Fixed Assets)Allahabad Bank - Commercial Paper 0.00 2500.00 Vehicle Loan - CITI Bank ( Against Hypothecation Of Vehicles ) 0.00 31.22

9680.64 7664.09

Amount in Rs. Lacs


SCHEDULE ‘D’

UNSECURED LOANS

From Financial Institutions :HDFC - WCDL LOAN 2000.00 0.00 From Others 2036.52 2594.63

4036.52 2594.63



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Amount in Rs. Lacs


SCHEDULE ‘F’

INVESTMENTS

Long-Term Invetsments

Quoted - At Cost 29.91 35.74 Unquoted - At Cost 6456.39 3108.47

Short-Term Invetsments

Quoted - At lower of Cost or Market Value 429.41 418.17

6915.71 3562.38

SCHEDULE ‘G’

Inventories (Valued At Cost)

Raw Materials, Packing Materials & Consumables 2165.05 2715.46 Traded Goods 10.65 6.29 Semi Finished Goods 92.41 107.84 Finished Goods 378.41 320.48 Scrap 2.96 6.59

2649.48 3156.66

SCHEDULE ‘H’

Debtors & Debit Balances

(a) Over 6 Months (Unsecured) Considered Good 1308.46 991.09

(b) Others (Unsecured) Considered Good 6488.99 6619.61

Unsecured, Considered good 7797.45 7610.70




Amount in Rs. Lacs


SCHEDULE ‘I’

CASH AND BANK BALANCESCash In Hand 13.52 12.61 Petty Cash 22.91 27.15 Balance with Scheduled Banks Current Accounts 152.94 -35.34 Fixed Deposit Accounts 3967.82 7377.04

4157.19 7381.46

SCHEDULE ‘J’

LOANS AND ADVANCES Advances to Goods Suppliers 1364.17 1493.50 Advances for Fixed Assets 247.11 318.92 Staff Advances 12.12 60.66 Balance with Revenue Authorities 1554.00 2767.99 Security and Other Deposits 268.23 216.00 Other Advances 9707.61 8035.74

13153.24 12892.81

SCHEDULE ‘K’

CURRENT LIABILITIES & PROVISIONSCreditors for Goods 7583.40 11366.66 Creditors for Transporter, Agent & Others 510.63 381.02 Advances from Customers 459.66 417.96 Creditors for Fixed Assets 231.95 68.55 Expenses Payable 473.21 492.56 Other Liabilities 1562.65 1961.67

10821.50 14688.42




Amount in Rs. Lacs


SCHEDULE ‘L’

SALES Manufacturing Sales 49380.16 39771.15 Trading Sales 6729.00 10153.22 Project Sales 658.29 261.14

56767.45 50185.51

SCHEDULE ‘M’

OTHER INCOMEJobwork Charges 236.26 449.74 Interest Income 1638.23 2081.96 Profit on Sale of Investments 0.00 5.40 Other Miscellaneous Income 48.23 79.96 Dividend Income 673.36 0.98 Income from Exchange Rate Fluctuation 135.60 -116.71

2731.68 2501.33

SCHEDULE ‘N’

OPERATING EXPENSES

Material ConsumedRaw Material, Packing Material & Consumables 26250.53 21329.96 Project Material 427.46 204.57

Raw Material, Packing Material & Consumables 26677.99 21534.53

Trading Goods 6261.36 10104.09

32939.35 31638.62




Amount in Rs. Lacs


OPERATING EXPENSES

SCHEDULE ‘O’

A) Manufacturing Expenses

Power & Fuel 560.57 357.62 Repairs & Maintenance - Civil, Vehicles & Others 283.21 285.05 Pump Truck Expenses 266.97 194.87 Insurance Charges 135.16 143.20 Security Service Charges 93.44 52.50 Repairs & Maintenance - P & M, Electricals 68.37 127.35 Factory Expenses 47.44 69.81 Excise Duty on Cl. St. Incr/Decr FG -3.43 31.01

Total A 1451.73 1261.41

B) Staff Costs

Salaries & Wages 1741.90 1278.55 Provident Fund Contribution 48.62 39.73 Bonus to Employees 39.55 33.77 Gratuity 29.47 20.84 Staff Welfare Expenses 28.27 16.90

Total B 1887.81 1389.79

C) Administrative Expenses

Remuneration to Directors 532.80 292.82 Consultancy Charges 231.80 240.19 Rent, Rates & Taxes 110.82 159.48 Conveyance Expenses 93.68 67.65 Office Expenses 52.30 37.67 Information & technology Expenses 45.38 46.18 Telephone Expenses 37.67 30.08 Donation 35.23 66.67 Printing & Stationery 34.33 29.19 Audit Fees 17.60 16.00 Postage Expenses 11.59 8.83 Internal Audit Fees 7.48 5.95 Legal Expenses 7.31 6.31 Director Sitting Fees 5.70 4.05

Total C 1223.69 1011.07



Amount in Rs. Lacs


OPERATING EXPENSES

SCHEDULE ‘O’ (Contd.)

D) Selling & Distribution Expenses

Sales Tax 3814.62 3374.81 Export Expenses 2989.51 2104.62 Transportation Charges 587.88 567.32 Discounts and Settlements 582.51 540.91 Sales / Agency Commission 568.54 566.60 Travelling Expenses 266.44 219.66 Sales Promotion Expenses 140.31 70.37 Misc. Sales Expenses 88.45 55.81 Advertisement Expenses 10.35 10.13 Bad Debts 0.00 521.09

Total D 9048.61 8031.32

Total A+B+C+D 13611.84 11693.59

46551.19 43332.21



Amount in Rs. Lacs


OPERATING EXPENSES

Schedule (N+O) as per list 46551.19 43332.21

SCHEDULE ‘P’

INCREASE/DECREASE IN STOCK -38.87 19.16

Total Operating Expenses (N+O+P) 46512.32 43351.37

SCHEDULE ‘Q’

INTEREST AND FINANCE CHARGES

Interest on Working Capital 462.54 667.95 Bank Charges 256.58 331.51 Interest on Vehicle and Term Loans 250.11 8.56 Interest on Loan 112.52 150.60 Derivative Loss 19.51 10.24 Loss on sales of Assets 1.33 0.00 Long Term Loss on Shares 3.87 32.18

1106.46 1201.04



Statement of Significant Accounting Policies forming part of Accounts For the year ended 31st March, 2011

1. Accounting Convention

The financial Statements are prepared on the accrual basis under the historical cost convention, in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956

2. Fixed Assets / Depreciation

Fixed Assets are stated at cost net of cenvat / value added tax less accumulated depreciation

Depreciation for the year is computed on the straight line method as per the rates prescribed in Schedule XIV to the Companies Act, 1956

3. Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been change in the estimate of recoverable amount.

4. Use of Estimates

The preparation of financial statements require estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of the financial statement and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialised.

5. Revenue Recognition

Revenue from Sales of product is recognized when the products are dispatched against the orders from customers in accordance with the contract terms.

6. Investments

Trade investments are the investment made to enhance the group’s business interest. Investments are either classified as current or long term based on the managements intention at the time of purchase. Current investment are carried at the lower of cost and fair value. Long term investments are carried at cost and provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment.

7 Inventories

Finished goods, traded items, raw material, packing material and work-in-process are valued at the lower of cost or net realisable value. Cost includes an appropriate portion of manufacturing overheads, where applicable. Finished goods & Semi Finished Goods are valued inclusive of Excise duty.

8. Foreign Currency Transactions

Outstanding foreign currency assets and liabilities are translated at the exchange rate Prevailing as on Balance Sheet date or forward cover rates, as the case may be. Gains or losses on cancellation of forward exchange contracts and relating to the acquisition of fixed assets are adjusted to the cost of such fixed assets and those related to other account are recognized in the Profit and Loss Account under respective heads of accounts. The difference between the forward rate and the exchange rate at the date of transaction is recognized as income or expenses over the life of contract.

9. Borrowing Costs

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. All other borrowing cost are charged to revenue.

10. Retirement Benefi t

Contributions to Provident Fund are deposited with the appropriate authorities and charged to the Profit and Loss Account as incurred. The Company has made provision for gratuity based on 15 days’ salary for each completed year of service.

11. Taxation

a. Provision is made for both current & deferred taxes. Current tax is provided on the taxable income using the applicable tax rate & tax laws.

b. The Deferred tax for timing differences is accounted for using the tax rates & laws that have been enacted or substantively enacted by the balance sheet date and is accrued with Accounting Standard 22-“Accounting for taxes on income” issued by the ICAI which includes current and deferred taxes.



c. Deferred tax Assets arising from timing differences are recognised only on the consideration of prudence and are reviewed at each Balance Sheet date.

12. Capital Work-In-Progress

The cost of assets not put to use before the year end, are disclosed under capital work-in-progress.

13. Insurance Claims

Insurance and other claims to the extent considered recoverable are accounted for in the year of claim based on the amount assessed by the surveyor. However, claim and refunds whose recovery cannot be ascertained with reasonable certainty, are accounted for on acceptance / actual receipts basis

14. Provision, Contingent Liabilities and Contingent Assets

Provision involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statement.

15. Leases

The Company’s significant leasing arrangements are in respect of operating leases for premises (residential, office, Stores, Godowns etc.). The leasing arrangement which are not cancelable range between 11 months and five years generally, and are usually renewable by mutual consent on agreed terms. The aggregate lease rentals payable are charged as rent including lease rentals.

16. Export Incentives

Export benefits under various scheme announced by the Central Government under Exim Policy are accounted on accrual basis to the extent considered receivable depending on the certainty of receipts.

17. Sales Tax Deferment at NPV basis

The company is having sales tax deferments benefits from Government of Maharashtra. Sales Tax Deferments shown as liability at Net Present Value basis.

18. Segment Accounting

a) Segment accounting Policies

Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting policies have been followed for segment reporting:

i) Segment revenue includes sales and other income directly identifiable with/allocable to the segment including inter segment revenue.

ii) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. Expenses which relate to the Company as a whole and not allocable to segments are included under “unallocable corporate expenditure.”

iii) Income which related to the Company as a whole and not allocable to segments is included in “unallocable corporate income”.

Statement of Significant Accounting Policies forming part of Accounts For the year ended 31st March, 2011


1. Contingent Liability

Amount in Rs. Lacs

FY 2010-11 FY 2009-10

01 In respect of counter guarantees given to Bank Rs. 3,038.79 3,701.4302 In respect of Excise matters in dispute / under Appeal Rs. 261.71 140.7403 In respect of Sales Tax Deferment

Payable as per NPV basis - 820.80 LacsRs. 2,076.18 3,233.17

04 In respect of Income Tax matters in dispute / under Appeal Rs. 18.24 -05 In respect of Sales Tax matters in dispute / under Appeal Rs. 85.87 -

2. Earning Per Share

Basic earning per share has been reported as per Accounting Standards – 20 relating to “Earning per share” which have been computed by dividing net profit after tax by the weighted average no of shares outstanding for the period as under

31st March, 2011 31st March, 2010

Net Profit for the year attributable to equity shareholders (Rupees in Lacs) 5,029.35 3,126.53Weighted Average No of Shares in Lacs 173.24 173.24Earning per Share (Rupees) 29.03 18.05

There are no potential equity shares as on 31st March, 2011 and accordingly the diluted Earning per share is the same as Basic Earning per Share.

3. Information pursuant to provisions of paragraph 3 and 4 of part II of schedule VI to the Companies Act, 1956:-

A) Capacity & Production

Material Unit

Licensed Capacity Installed Capacity Production

FY 2010-11 FY 2009-10 FY 2010-11 FY 2009-10 FY 2010-11 FY 2009-10

Cartridge Explosives

M.T. 76,590.00 76,600.00 95,700.00 76,600.00 49,859.14 54,070.12

Detonators Mn Nos. 50.00 50.00 62.50 62.50 34.65 10.55Detonating Fuse Mn Nos. 75.00 39.00 93.00 39.00 56.96 29.68 PETN M.T. 1,650.00 1,100.00 2,060.00 1,100.00 744.23 381.01Cast Booster M.T. 1,500.00 1,500 .00 1,875.00 1,500.00 269.10 184.32 Speciality Chemicals

M.T. 2,880.00 1,080.00 2,880.00 1,080.00 1,409.06 1,054.78

Site Mixed (Emulsion) Explosives

M.T. 1,84,860.00 1,74,430.00 2,36,000.00 1,74,430.00 79,875.45 57,857.49

Other M.T. 991.4051 Nos

Notes to the Accounts



Notes to the Accounts Contd.

B. Turnover & Stocks

Product Unit

Turnover

Quantity Value

(In Lacs)Quantity

Value (In Lacs)

10-11 09-10

Cartridge Explosives M.T. 49,979.62

49,380.16

54,171.04

39,742.87

Detonators Mn Nos. 34.76 10.51 Detonating Fuse Mn Mtrs. 58.97 30.58 Others M.T.

Nos.1,447.78

47.00 757.64

Scrap & By Product M.T.Nos.

978.13 2,095.00

703.52 2,481.00

Site Mixed Emulsion Explosives M.T. 79,875.45 57,857.49 Trading Activities

Ammonium Nitrate M.T. 526.177,387.29

44,884.50 10,442.65Others M.T.

Mn Nos.219.370.203

854.17

Closing Stock (Finish Goods & Scrap)

Material Unit

Closing Stock (Finish Goods & Scrap)

Quantity Value

(In Lacs)Quantity

Value (In Lacs)

10-11 09-10

Cartridge Explosives M.T. 469.48378.40

628.28320.47Detonators & Accessories Mn Nos. 0.61 0.73

Detonating Fuse Mn Mtrs. 2.53 4.56Other M.T.

Nos.141.16

42.95

29.02

6.58Scrap & By Product M.T.

Nos.28.69

491.00 193.76952.00

A. Raw Material And Packing Material & Stores

Product

Consumption

Quantity Value

(In Lacs)Quantity

Value (In Lacs)

10-11 09-10

Raw Material (Cartridge Explosives) M.T. 43,394.66

26,677.98

49,149.99

21,534.52

Raw Material (Site Mixed) M.T. 61,188.66 48,050.93Raw Material (Detonators) Mn Nos.

Mn Mtrs.M.T.

71.013.65

93.81

20.127.54

39.14Detonating Fuse M.T. 941.58 518.04Other & stores M.T. 2,781.79 1,727.45Packing Material M.T.

Mn Nos.1,890.96

7.99 1,345.66

7.35


Amount in Rs. Lacs

4FY 2010-11 FY 2009-10

A) C.I.F. Value of Imports i) Raw Material 9,898.88 14,781.87 ii) Capital Goods 4.99 255.82

B) Earning in Foreign Exchange Export of Goods calculated on FOB basis 7,267.05 4,132.63 (CIF basis Value) 9,399.14 5,360.61

C) Expenditure in Foreign Currency On account of Bank Interest 333.79 287.87 On account of Sales Commission 256.98 297.38 On account of Ocean Freight 1,849.96 1,636.00 On account of Sales Promotion Expenses 104.63 43.71 On account of Other Expenses 119.96 160.39

5. Related party disclosures required as per AS-18 on ̀ Related Parties disclosures’ issued by the Institute of Chartered Accountants of India, are below for the year ended on 31st March, 2011.

1. Holding Company : NIL

2. Subsidiaries : a) Economic Explosives Limited

b) Solar Mines & Minerals Ltd.

c) Solar Mining Resources Ltd.

d) Navbharat Coalfields Ltd.

3. Fellow Subsidiaries : NIL

4. Overseas Subsidiaries : a) Solar Overseas Mauritius Limited

b) Solar Agro Florestal LDA*

c) Solar Industries Mocambique LDA*

d) Solar Recursos Minerals LDA*

5. Fellow Overseas Subsidiaries a) Solar Explochem Mauritius Ltd.*

b) Solar Netherlands Corporatie U.A.

c) Solar Netherlands Overseas B.V.

d) Ilci Patlayici Maddeler Sanayi VeTicaret Anonim Sirketi

e) PATSAN Pattlayici Maddeler Sanayi Ve Ticaret

f) Solar Overseas Singapore Pte Limited

g) Solar Nigachem Nigeria Limited*

h) Nigachem Nigeria Limited

i) Solar Explochem Zambia Limited

j) Solar Mining Services Australia Pty Ltd.*

k) Solar Nitrochemicals Limited*

l) PT. Solar Mining Resources*





6. Associates a) Solar Synthetics Private Limited

b) Mahakal Infrastructures Private Limited

c) Mahakal Project Private Limited

d) Nagpur Infrastructure Private Limited

e) Solar Bhatgaon Extension Mines Private Limited

f) SMS Bhatgaon Mines Extension Private Limited

g) Bhatgaon Extension Mines Private Limited

h) Bhatgaon Mines Private Limited

i) Sunbeam Explosives Limited

j) Sunrise Explosives Limited

k) Solar Initiating Systems Limited

l) Madanpur North Coal Fields Limited

m) Solar Processors Limited

n) Commercial Sales Corporation

o) Australian Explosive Technologies Group PtyLtd

* Note: The Company has not commenced any business operations, hence financial performance is not available.

6. Key Management Personnel : a) Shri.S.N.Nuwal

b) Shri K.C.Nuwal

c) Shri Manish Nuwal

d) Shri K.S. Talesra

e) Shri R.D.VakilAmount in Rs. Lacs

Particulars

Subsidiaries AssociatesKey Management

Personnel

FY 2010-11 FY 2009-10 FY 2010-11 FY 2009-10 FY 2010-11 FY 2009-10

Sale of Goods 4,670.34 348.90 277.60Purchase of Materials 2,148.40 1,465.90 2.97 31.41Services Received 367.45 459.32 43.52Services Rendered 236.26 449.73 -Remuneration - - 532.80 292.82Loan Given Outstanding 537.90 415.51 7,418.72 5,628.79Loan Received Outstanding 728.76 1,137.02 595.60Interest Received 49.74 42.21 846.40 689.86Interest Paid 121. 32 112.52 28.82Dividend received 672.00Project Sale 658.29Discount given 4.94Purchase of Land 273.24Balance Outstanding 2,572.80 -63.63 - 271.15 -226.41


7. Investment in Shares of subsidiary Companies in the year ended 31st March 2011Amount in Rs. Lacs

FY 2010-11 FY 2009-10

1. Economic Explosives Ltd. 1,449.64 1,449.642. Solar Overseas Mauritius Ltd. 3,882.21 691.314. Solar Mines & Minerals Ltd 2.55 2.555. Navbharat Coalfields Ltd. 800.00 800.006. Solar Mining Resources Ltd 2.55 2.557. Solar Recoursos Minerals LDA 0.37 0.378. Solar Industrias LDA 0.37 0.379. Solar Agro Florestal LDA 0.37 0.37

8. Employee retirement benefits

Contributions to Provident Fund are deposited with the appropriate authorities and charged to the Profit and Loss Account as incurred. The Company has made provision for gratuity based on 15 days’ salary for each completed year of service.

9. As regards the Accounting Standard 17 `Segment Reporting’ there is two business segments, one is manufacturing and trading of explosives and other is trading of Ammonium Nitrate.

Amount in Rs. Lacs

Particulars

Solar Industries India Limited STANDALONE

Audited Quarter ended Audited Year ended

31st March 2011

31st March 2010

31st March 2011

31st March 2010

1. Segment Revenue a. Explosives 12,686.28 10,726.26 45,552.15 37,143.41 b. Trading 192.82 1,877.91 5,101.71 9,544.67 c. Others 2,486.24 1,303.46 2,746.74 1,662.39 Total 15,365.34 13,907.63 53,400.60 48,350.47 Less: Inter segment revenue 0.00 0.00 0.00 0.00 Revenue from Sales & other Income and exchange fluctuation

gains15,365.34 13,907.63 53,400.60 48,350.47

2. Segment Results Profit/(loss) (before tax and interest from each segment) a. Explosives 1,809.86 780.01 6,291.96 4,579.57 b. Trading 14.05 12.46 (67.24) (212.46) Total 1,823.91 792.47 6,224.72 4,367.11 Less: (i) Interest paid 531.61 170.99 1106.46 1201.04 (ii) Other un-allocable expenditure net off un-allocable

income(490.03) (722.22) (2,452.53) (1,753.01)

Total Profit Before Tax 1,782.33 1,343.7 7,570.79 4,919.083. Capital Employed a. Explosives 30,608.36 26,782.81 30,608.36 26,782.81 b. Trading 0.00 0.00 0.00 0.00 c. Others 0.00 0.00 0.00 0.00 Total 30,608.36 26,782.81 30,608.36 26,782.81

Sales Tax Provision at NPV basis of Rs. 306.77 Lacs is included in Sales Tax Expenses.




10. PAYMENT MADE TO AUDITORS:Amount in Rs. Lacs

FY 2010-11 FY 2009-10

1. As Audit fees 17.60 16.00 2. Legal matters 2.93 5.42 3. As VAT Audit Fees 2 1.25

11. In earlier year the Company has supplied explosives to Coal India Ltd from 1st March, 2006 to 30th June, 2006 as per old rate contract rates on confirmation from Coal India Ltd that new rate contract will be issued effective from 1st March, 2006 Coal India Ltd has issued new rate contract w.e.f 29th July, 2006 without covering the period From 1st March, 2006 to 30th June, 2006. The Company has protested and now this is sub Juidice at Hon. Calcutta High Court on the ground that since no rate contract has been issued for 01.03.06 to 30.06.06 so rates of old rate contract shall be applied. During the year Hon. Calcutta High Court has given an order asking Bank Guarantee against such deductions and company has submitted the same which is included in contingent liability. The court has passed an order for release of payment against Bank Guarantee for Cartridge & Accessories Division only and allowed full deduction for Bulk Division pending final decision in the matter by the Hon. Calcutta High Court.

12. During the year company has traded Ammonium Nitrate of Rs. 5101.71 Lacs.

13. Company has made investment during FY 2008-09 in two SPV companies along with SMS Infrastructure Pvt.Ltd. to enter into Joint Venture with CMDC for mining work and separate Joint venture companies is formed in which the stake of CMDC is 51%. The stake of Solar Industries India ltd. in SPV Company is as follows.

Solar Bhatgaon Ext.Mines Pvt.Ltd. 49%

SMS Bhatgaon Mines Extension Pvt.Ltd. 49%

14. During the year the Company has invested $ 70.00 Lacs in its foreign subsidiary Solar Overseas Mauritius Ltd.further Solar Overseas Mauritius Ltd.has invested in Solar Netherlands Corporatie U.A., Solar Netherlands Overseas B.V., Ilci Patlayici Maddeler Sanayi VeTicaret Anonim, PATSAN Pattlayici Maddeler Sanayi Ve Ticaret, Solar Overseas Singapore Pte Limited , Nigachem Nigeria Limited, Solar Explochem Zambia Limited

15. During the year the Company has executed the turnkey project of installation of Bulk Explosive Manufacturing Plant for its associate company Nigachem Nigeria Limited. of Rs. 626.79 Lacs

16. During the year the Company has provided Rs. 546.90 Lacs against Powder Factor deductions for its supplies of explosives to Coal India Ltd.

17. Sundry Creditor includes outstanding balance of M/s Citco Waren Handel Sgesellschaft & Quantum Fertilizers Ltd. Rs. 6787.26 Lacs which includes payment outstanding against Buyers Credit is Rs. 6787.26 Lacs.

18. Power Consumption

FY 2010-11 FY 2009-10

Purchase Unit (in Kwh.) 44,71,514 Units 39,42,211 UnitsOwn Generation (in Kwh.) 3,35,000 Units 2,62,285 Units

19. Some of the customers and suppliers accounts are pending for confirmation/reconciliation and the same have been taken as per the balances appearing in the books. Any differences arising on account of such reconciliations, which are not likely to be material, will be accounted for as and when these reconciliations are completed.

20. Remuneration Paid to Executive DirectorsAmount in Rs. Lacs

Salary Commission

FY 2010-11 FY 2009-10 FY 2010-11 FY 2009-10

208.80 156.60 324.00 136.22



21. Capital work in progress in Fixed Assets

Company has got status of “Mega Project” from Government of Maharashtra. Company has made investment in Fixed Assets. Project work is not completed, hence shown under Capital WIP.

Civil Construction worth Rs. 471.36 Lacs, Plant & Machinery worth Rs. 693.78 Lacs, Electric Installation worth Rs. 49.65 Lacs, and other work in progress Rs. 409.67 Lacs.

22. Excise Duty shown under expenditure represents the aggregate of the difference between Excise Duty on the Opening and Closing Stock of Finished Goods.Excise Duty deducted from Sales represents Excise Duty paid.

23. In line with the Company’s risk management policy. The various financial risks mainly relating to changes in the exchange rates, interest rates and commodity prices are hedged by using a combination of forward contracts, swaps and other derivative contracts, besides the natural hedges.

Unhedged foreign currency exposures as at 31st March, 2011 are as under. Amount in Rs. Lacs

i. Receivables, Including firm commitments and highly probable forecasted transactions 3,593.88ii. Payables, including firm commitments and highly probable forecasted transactions 10,906.49

24. Sundry Creditors for goods and expenses include dues to Micro Small & Medium Scale Business Entities aggregating to Rs. 95.44 Lacs The names of Micro Small & Medium Scale Business Entities (to the extent of information available with the management) to whom the Company owes a sum exceeding Rs. 1 lac each Basic Chemical Industry, Kalinga Wrappers, Sunrise Technologies,Welset Plast Extrusion Pvt.Ltd.,Sankhala Industries,Bharat Solar Cable,Rudraksha Allied Chemical Pvt.Ltd.,Hindustan Gum & Chemicals Ltd.,Gujrat Polymers,Anupam Colours Pvt.Ltd.,Geeta Packaging Industries, Shree Gajanan Agro Industries,Maxwell Poly Products,Sachin Polypack & Gayatri Packaging Industries. None of the aforesaid outstanding is due for payment as at 31st March, 2011 as per agreed terms.

25. Export Incentive receivable under duty free credit entitlement included under the head Loans & Advances is pending due to disposal for some procedural aspects with Government. Shortfall / excess if any will be taken into accounts as and when it is determined.

26. Manufacturing sales includes input material sales

27. Disclosure as required by Accounting Standard 19 “Leases” issued by the institute of Chartered Accounts of India are given below:

Being the Company is Lessee:

(i) The Company’s significant leasing arrangements are in respect of godown / residential / office premises (including furniture and fittings therein, as applicable). The aggregate lease rental payable is charged to Profit and Loss Account as Rent.

(ii) The Leasing arrangements, which are cancelable at any time on month to month basis and in some cases between 11 months to 5 years, are usually renewable by mutual consent on mutually agreeable terms. Under these arrangements generally refundable interest free deposits have been given.

28. All known liabilities have been taken into consideration.

29. The previous years figures have been regrouped/reclassified where necessary, to conform to the current year’s presentation.

Place : NagpurDate : 19th May, 2011As per our Report of even date annexedFor Gandhi Rathi & Co., For And On Behalf Of The BoardChartered Accountants S.N.Nuwal Manish Nuwal





Annexure to Notes on Account No.6 Schedule VI part requirement

[Vide GSR No. 388 (E) Dt. 15.5.95 and press Note No. 2/95 (No. 3/24/94/CL-V) Dt. 18.7.95

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE

I. Registration Details

CIN No. L74999MH1995PLC085878 State Code 1 1

Date Balance Sheet 3 1 - 0 3 - 2 0 1 1

II. Capital Raised during the year :

Public Issue N I L Right Issue N I L

Bonus Issue N I L Private placement N I L

III. Position of Mobilisation & Development of Funds :

Total Liabilities 3 7 6 9 5 . 8 3 Total Assets 3 7 6 9 5 . 8 3

A) Sources of Funds

Paid up Capital 1 7 3 2 . 3 8 Reserve & Surplus 2 1 0 2 4 . 5 2

Secured Loan 9 6 8 0 . 6 4 Unsecured Loan 4 0 3 6 . 5 2

Deferred Tax Liability 1 2 2 1 . 7 7

B) Application of funds

Net Fixed Assets 1 3 6 7 2 . 4 9 Investments 6 9 1 5 . 7 0

Net Current Assets 1 6 9 3 5 . 8 7 Misc. Expenses 1 7 1 . 7 7

IV. Performance of the Company

Total Turnover 5 6 7 6 7 . 4 5 Total Expenditure 4 9 1 9 6 . 6 6

Profit Before Tax 7 5 7 0 . 7 9 Profit After Tax 5 0 2 9 . 3 5

Earning per share In Rs. 2 9 . 0 3 Dividend Rate % 4 0

V. Generic Names of Three Principal Products/Services of the company (As per Monetary Terms)

* Item Code No. 3 6 0 2 0 0 . 0 0 * Product Description

S L U R R Y /

E M U L S I O N

E X P L O S I V E S

* Item Code No. 3 6 0 3 0 0 . 0 0 * Product DescriptionD E T O N A T O R S

/ D. F .

* Item Code No. N . A . * Product Description N . A .

In terms of the publication Indian Trade classification by Ministry of Commerce, D.G. of Commercial Intelligence & Statistics, Kolkata - 770 001.


This Page Is Intentionally Left Blank



AUDITOR’S REPORT TO THE MEMBERS OF SOLAR INDUSTRIES INDIA LIMITED

1. We have audited the attached Consolidated Balance Sheet of Solar Industries India Limited, as at 31st March, 2011, the Consolidated Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that :

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash flow statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

(e) According to the information and explanations given to us and on the basis of written representations from Directors taken on record by the Board of Directors, we report that none of the Directors are disqualified as on 31st March, 2011 from being appointed as director under Section 274(1)(g) of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanations given to us, and subject to our notes/observations brought out elsewhere in the report, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true a fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011.

(b) in the case of the Profit and Loss Account of the Profit for the year ended on that date.

(c) in the case of Cash flow statement, of the Cash flows for the year ended on that date.

FOR GANDHI RATHI & CO.,CHARTERED ACCOUNTANTS

(C.N.RATHI)PARTNER

PLACE : NAGPUR M. No. 39895DATED : 19th May, 2011 Firm Reg. No. 103031W


Consolidated Balance Sheet as on 31st March, 2011

Amount in Rs. Lacs

Particulars ScheduleAS AT

31st March, 2011AS AT

31st March, 2010

SOURCES OF FUNDS Share Holders’ FundShare Capital A 1732.38 1732.38 Reserves and Surplus B 29871.58 24792.00

31603.96 26524.38

Minority Interest 2745.27 6.21 Loan FundsSecured Loans C 11081.67 7975.58 Unsecured Loans D 5086.44 2792.25 16168.11 10767.83

Deferred Tax Liability 1691.77 1419.66

Grand Total 52209.11 38718.08

APPLICATION OF FUNDSGOODWILL 327.14 0.00

Fixed Assets EGross Block 24114.14 15133.47 Less: Depreciation 4576.56 3657.38 Net Block 19537.58 11476.09 Capital Work-In-Progress 2645.14 2083.61 Net Fixed Assets 22182.72 13559.70

Investments F 1225.80 1044.67 1225.80 1044.67

Current Assets, Loans & AdvancesInventories G 5920.86 3795.09 Debtors and Other Debit Balances H 9686.01 8977.02 Cash and Bank Balances I 6702.33 9397.83 Loans and Advances J 19512.03 16844.12 41821.23 39014.06 Less: CURRENT LIABILITIES & PROVISIONS K 13901.73 15304.37 Net Current Assets 27919.50 23709.69

MISCELLANEOUS EXPENDITURE 553.95 404.02 (To The Extent Not Written Off )

553.95 404.02 GRAND TOTAL 52209.11 38718.08


Notes on accounts as per scheduleAs per our Report of even date annexedFor Gandhi Rathi & Co., For And On Behalf Of The BoardChartered Accountants S.N.Nuwal Manish Nuwal




Consolidated Profit And Loss Accountfor the year ended 31St March, 2011

Amount in Rs. Lacs

Particulars ScheduleFOR THE

YEAR ENDED 31st March, 2011

FOR THE YEAR ENDED

31st March, 2010INCOMESales L 72285.81 59019.31 Less: Excise Duty 4340.73 3277.93

67945.08 55741.38 Other Income M 2701.77 2598.79

TOTAL 70646.85 58340.17 EXPENDITUREOperating Expenses N+O+P 55799.57 47140.39 Depreciation E 766.20 784.96 Interest and Finance Charges Q 1275.86 1335.98

TOTAL 57841.63 49261.33

PROFIT BEFORE TAX 12805.22 9078.84

Provision for TaxCurrent Tax 4213.04 3095.81 Deferred Tax 257.76 138.13 Prior Period Taxes 38.88 -14.47

4509.68 3219.47

PROFIT AFTER TAX (Before adj. for Minority Interest) 8295.54 5859.37 Share of Profit transfer to Minority Interest 735.88 0.00 PROFIT AFTER TAX (After adj. for Minority Interest) 7559.66 5859.37 Balance Brought Forward 8457.74 6017.12 BALANCE AVAILABLE FOR APPROPRIATION 16017.40 11876.49

APPROPRIATIONInterim Dividend 692.95 606.33 Proposed Dividend 692.95 606.33 Tax on Dividend 230.18 206.09 General Reserve 3000.00 2000.00 Balance C/F to Balance Sheet 11401.32 8457.74

TOTAL 16017.40 11876.49

Basic Earnings Per Share Rs. 43.64 33.82 (See Note 7)


Notes on accounts as per scheduleAs per our Report of even date annexedFor Gandhi Rathi & Co., For And On Behalf Of The BoardChartered Accountants S.N.Nuwal Manish Nuwal



Consolidated Cash Flow Statement for the year ended on 31st March, 2011

Amount in Rs. Lacs


FY 2009-10

A. CASH FLOW FROM OPERATING ACTIVITIES Net Profit Before Tax 12805.22 9078.84

Adjustments for : Depreciation 766.21 784.96 Interest Expense 1275.86 1335.98 Exchange Reserve -123.73 0.00

1918.34 2120.94

Operating Profit before working Capital Changes 14723.56 11199.78

(Increase)/Decrease in Sundry Debtors -708.99 1339.87 (Increase)/Decrease in Inventories -2125.77 -1031.05 (Increase)/Decrease in Loans & Advances -2667.91 -4622.61 Increase/(Decrease) in Current Liabilities -1402.64 552.96

-6905.31 -3760.84

Cash Generated from Operations 7818.25 7438.94

Deferred Tax 257.76 138.14 Income Tax Paid 4213.04 3095.81 Prior period tax 38.88 -14.47

4509.68 3219.47

Net Cash from Operating Activities 3308.57 4219.47

B. CASH FLOW FROM INVESTING ACTIVITIES

Increase in Fixed Assets -9652.64 -2366.29 Depreciation w/back 219.43 0.00 Sale of Fixed Asset 43.99 0.00 Increase in pre op Exp -149.93 -122.26 Increase (+) in Investment -181.14 -603.70 Purchase Of Goodwill -327.14 0.00

Net Cash from Investing Activities -10047.43 -3092.24



Consolidated Cash Flow Statement for the year ended on 31st March, 2011

Amount in Rs. Lacs


FY 2009-10

C. CASH FLOW FROM FINANCING ACTIVITIES

Changes in Working Capital Loan 2465.94 -1842.99 Decrease in term loan -218.43 0.00 Increase in other secured loan 3389.80 6359.00 Repayment of Commercial Paper -2500.00 0.00 Repayment of Vehicle Loan -31.22 0.00 Increase in overseas Reserves 47.09 0.00 Increase in Minority Interest 2739.06 0.00 Share of Profit transfer to Minority Int. -735.88 0.00 Capital reserve on consolidation -787.35 0.00 Increase In Unsecured Loans 2294.19 -922.66 Proposed Dividend -692.95 -606.33 Interim Dividend -692.95 -606.33 Interest -1275.86 -1335.98 Deferred Tax 272.11 138.14 Tax on Dividend -230.18 -206.09

Net Cash from Financing Activities 4043.37 976.74

Net Increase in Cash & Cash equivalents -2695.49 2103.97

Notes :

1) Cash & Cash equivalents at the beginning of period 9397.82 7293.85 Cash & Cash equivalents at the end of period 6702.33 9397.82

-2695.49 2103.97

2) The above cash flow statement has been prepared in accordance with the requirements of Accounting Standard 3“Cash Flow Statement“ issued by the Institute of Chartered Accountants of India.

Place : NagpurDate : 19th May, 2011Notes on accounts as per scheduleAs per our Report of even date annexedFor Gandhi Rathi & Co., For And On Behalf Of The BoardChartered Accountants S.N.Nuwal Manish Nuwal



Amount in Rs. Lacs


SCHEDULE ‘A’

SHARE CAPITAL

Authorised Share Capital



1732.38 1732.38

SCHEDULE ‘B’

RESERVES AND SURPLUS

General Reserve 10753.66 7706.58 Exchange Rate Reserve -123.73 0.00 Profit & Loss Account 11401.32 8457.74

Capital ReserveShare Premium 7790.33 7790.33

Capital Reserve on Consolidation 0.00 787.35

State Capital Incentive 50.00 50.00

29871.58 24792.00

Schedule forming part of the accounts for the year ended 31st March, 2011



Schedule forming part of the accounts for the year ended 31st March, 2011 (contd.)

Amount in Rs. Lacs


SCHEDULE ‘C’

SECURED LOANS

Term Loan - Development Bank Of Singapore 4119.23 4119.23 Term Loan (Windmill) 0.00 218.43 Vehicle Loan 0.00 31.22 (On tangible , Movable & Immovable Fixed Assets)

SBI IFB FCNR Cash Credit 1421.86 999.96 Axis Bank - WCDL 1371.88 0.00 Bank of India - Cash Credit 376.07 106.74 HSBC Export Packing Credit A/C 893.82 0.00 BOI OD - Against FDR 1315.31 0.00 SCB - Export Packing Credit 1180.67 0.00 Allahabad Bank - CP 0.00 2500.00 Grantee Bank Turkey CC 57.42 Diamond Bank Nigeria CC 345.41 0.00

Hypothecation of Stocks of Raw Materials, Finished Goods, Goods in Process, Stores, Receivables and other Current Assets, & Second Charge on Fixed Assets of the Company.

11081.67 7975.58

SCHEDULE ‘D’

UNSECURED LOANS

From Financial Institutions :HDFC - WCDL Loan 2000.00 0.00

Export Packing Credit - SCB 0.00 906.90

From Others 2167.45 595.60 Sales Tax Deferral Loan 918.99 1289.75

5086.44 2792.25


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SCHEDULE ‘F’

INVESTMENTSLONG-TERM INVESTMENTSQuoted – At Cost 29.91 35.74Unquoted – At Cost 766.48 590.76SHORT-TERM INVESTMENTSQuoted – At lower of Cost or Market Value 429.41 418.17

1225.80 1044.67

SCHEDULE ‘G’

INVENTORIES (Valued at Cost)Raw Material and Packing Material 4720.66 3109.18 Traded Goods 10.65 6.29 Finished Goods 1036.66 514.16 Semi-Finished Goods 129.87 124.22 Scrap 23.02 41.24

5920.86 3795.09

SCHEDULE ‘H’

DEBTORS & DEBIT BALANCES Trade Debtors (Unsecured, Considered Good ) 9686.01 8977.02

9686.01 8977.02

SCHEDULE ‘I’

CASH AND BANK BALANCESCash In Hand 98.50 43.63 Balance with Scheduled Banks-Current Accounts & Fixed Deposits 6599.60 8892.68 Balance with Non-Scheduled Banks-Current Accounts & Fixed deposits 4.23 461.52

6702.33 9397.83

SCHEDULE ‘J’

LOANS AND ADVANCES Advances To Suppliers 1922.60 1747.56 Advances for Fixed Assets 604.46 318.92 Employee Advances 39.35 66.19 Balances With Revenue Authorities 1818.57 2934.90 Security & Other Deposits 345.78 275.58 Other Loans and Advances 14781.27 11500.97

19512.03 16844.12



Amount in Rs. Lacs


SCHEDULE ‘K’

CURRENT LIABILITIES & PROVISIONSCreditors for Goods 8520.75 11359.83 Creditors for Expenses & Others 607.18 458.20 Customers’ Advances 639.32 506.54 Creditors for Fixed Assets 231.95 68.55 Expenses Payable 779.89 683.34 Other Liabilities 3122.64 2227.91

13901.73 15304.37

SCHEDULE ‘L’

SALES

Manufacturing Sales 62162.34 47590.04 Trading Sales 9376.33 10302.73 Other Sale 747.14 1126.54

72285.81 59019.31

SCHEDULE ‘M’

OTHER INCOME

Interest Income 2325.18 2165.46 Interest on Bank deposits 18.93 362.68 Gain from exchange rate Fluctuation 214.68 0.00 Dividend Income 1.36 1.05 Other Miscellaneous Income 141.62 69.60

2701.77 2598.79

OPERATING EXPENSESSCHEDULE ‘N’

MATERIAL CONSUMED

Raw Materials, Packing Materials & Consumables 29577.65 22714.85 Project Material 427.46 0.00

30005.11 22714.85

Trading Goods 8990.13 9950.00

Total ‘N’ 38995.24 32664.85




Amount in Rs. Lacs


OPERATING EXPENSES

SCHEDULE ‘O’

A) MANUFACTURING EXPENSES Power & Fuel 676.64 434.78 Repairs & Maint. - P & M & Electrical 119.13 154.98 Repairs & Maint. - Civil, Vehicles & Others 319.34 394.96 Insurance 188.62 196.23 Factory Expenses 93.38 90.27 Security Service Charges 130.41 76.00 Excise Duty 18.98 34.06 Pump Truck Expenses 299.47 194.87 TOTAL A 1845.97 1576.15

B) STAFF COSTS Salaries and Wages 2895.59 2004.91 Bonus to Employees 60.95 53.77 Gratuity 46.52 29.37 Provident Fund Contributions 73.51 62.11 Staff Welfare Expenses 53.72 31.12

TOTAL B 3130.29 2181.28

C) ADMINISTRATIVE EXPENSES Remuneration to Directors 558.61 314.32 Conveyance Expenses 182.65 99.81 Consultancy Charges 427.87 303.12 Telephone Expenses 50.13 34.19 Printing & Stationery Expenses 46.42 35.41 Office Expenses 109.29 35.16 Rent, Rates & Taxes 150.66 168.90 Donation 49.89 101.67 Audit Fees 35.93 24.50 Postage & Telegram Expenses 12.98 10.02 Legal Expenses 8.85 16.94 Internal Audit Fees 12.45 7.35 IT Expenses 47.38 53.92 Miscellaneous Expenses 14.30 14.06

TOTAL C 1707.41 1219.37


Amount in Rs. Lacs


OPERATING EXPENSES

SCHEDULE ‘O’ (Contd.)

D) SELLING & DISTRIBUTION EXPENSES Transportation Expenses 652.84 624.88 Export Expenses 3283.52 2204.53 Sales Tax 4636.29 4163.79 Sales / Agency Commission 706.76 747.82 Travelling Expenses 298.90 242.58 Sales Promotion Expenses 253.04 73.86 Discount & Settlement Expenses 687.83 742.21 Advertisement Expenses 10.35 10.13 Miscellaneous Expenses 88.45 576.97

TOTAL D 10617.98 9386.77

TOTAL A+B+C+D 17301.65 14363.57

Total ‘ N + O ‘ 56296.89 47028.42





Amount in Rs. Lacs


OPERATING EXPENSES

Schedule (N+O) as per list 56296.89 47028.43

SCHEDULE ‘P’

( INCREASE ) / DECREASE IN STOCKS -497.32 111.97

Total Operating Expenses (N+O+P) 55799.57 47140.39

SCHEDULE ‘Q’

INTEREST AND FINANCE CHARGES

Interest on FCNR, Other Term Loan & Vehicle Loan 253.44 38.99Interest on Cash Credit 533.65 718.05Interest Charges - Others 135.21 29.27Bank Charges 317.84 364.36Other Charges 11.02 0.00Foreign Exchange Fluctuation - Loss 0.00 157.00Loss on sale of assets 1.33 0.00Loss On Shares/Derivative loss 23.37 28.31

1275.86 1335.98


Significant Accounting Policies

1. Basis of preparation of fi nancial statements:

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in India for the year ended 31st March, 2011.

2. Principles of consolidation

The consolidated financial statements of the Company include financial statements of its subsidiaries, where Solar Industries India Limited is able to exercise control over the operating and financial policies of the companies. All material inter-company accounts and transactions are eliminated on consolidation.

The consolidated financial statements have been prepared on the following basis:

a) The financial statements of the Company and its subsidiary companies are combined on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intragroup balances and intra-group transactions resulting in unrealised profits or losses in accordance with Accounting Standard (AS) 21- “Consolidated Financial Statements” issued by the Institute of Chartered Accountants of India.

b) In case of foreign subsidiaries, being non-integral foreign operations, revenue items & all assets and liabilities are converted at rates prevailing at the end of the year. Any exchange difference arising on consolidation is recognised in the exchange fluctuation reserve.

c) The difference between the cost of investment in the subsidiaries, over the net assets at the time of acquisition of shares in the subsidiaries is recognised in the financial statements as Goodwill or Capital Reserve as the case may be.

d) Minority Interest’s share of net profit of consolidated subsidiaries for the year is identified and adjusted against the income of the group in order to arrive at the net income attributable to shareholders of the Company.

e) Investment in Associate Companies has been accounted under the equity method as per (AS 23) – “Accounting for Investments in Associates in Consolidates Financial Statements”.

f) Investments other than in subsidiaries and associates have been accounted as per Accounting Standard (AS) 13 on “Accounting for Investments”.

g) As per management representation we have consolidated unaudited results of Overseas Subsidiary Solar Overseas Mauritius Ltd. & its fellow subsidiaries valued at historical cost basis.

3. Subsidiaries

The financial statements of the following subsidiary companies have been consolidated as per Accounting Standard-21 on “Consolidated Financial Statements” issued by Institute of Chartered Accountants of India.

Proportion of ownership interest (%)

Name of the Subsidiary Company Year Ended on 31st March, 2011

Economic Explosives Ltd 100%Solar Mines & Minerals Ltd 51%Solar Mining Resources Ltd 51%Solar Overseas Mauritius Ltd 100%Navbharat Coalfields Ltd. 74%

4. Uniform Accounting Policies

The consolidated financial statements have been prepared on the basis of the accounting policies adopted by the individual entities, as indicated under financial statements of respective companies.

Solar Industries India Limited and Economic Explosives Limited have been providing Depreciation in books on Straight Line Method since inception, whereas Solar Components Private Limited, a Wholly-Owned Subsidiary of Solar Industries India Limited, which have been merged with Economic Explosives Ltd. with effect from 1st April, 2009, the Appointed Date has provided Depreciation in books on Written Down Value Method since inception. Uniform accounting policy has been adopted. Due to the effect of change in accounting policy of depreciation from WDV to SLM profit has been increased by Rs. 83.38 Lacs.

5. Business acquisitions

During the year the Company has acquired business of Nigachem Nigeria Limited, PATSAN Pattlayici Maddeler Sanayi Ve Ticaret & ILCI Patlayici Maddeler Sanayi Ve Ticaret Anonim Sirketi. through its Subsidiary Solar Overseas Mauritius Limited.




1. Description of Business

Solar Industries India Limited, a explosives manufacturing company together with its subsidiaries, is engaged in manufacturing in various explosives products such as Slurry & emulsion base explosives, bulk explosives, detonators, detonating fuse, PETN and accessories required for the above product.

2. Taxation

The Tax Calculations are as under:

a) Provision is made for both current & deferred taxes. Current tax is provided on the taxable income using the applicable tax rate & tax laws.

b) The Deferred tax for timing differences is accounted for using the tax rates & laws that have been enacted or substantively enacted by the balance sheet date and is accrued with Accounting Standard 22-“Accounting for taxes on income” issued by the ICAI which includes current and deferred taxes.

c) Deferred tax Assets arising from timing differences are recognised only on the consideration of prudence and are reviewed at Balance Sheet date.

3. Effects of Consolidation:

As a result of consolidation, the following are the eliminations as a result of intra group transactions in the year ended 31st March, 2011

Amount in Rs. Lacs

Name of the CompanySale of Goods

Purchase of Material

Services received

Services rendered

Interest received

Interest Paid

Dividend received

Dividend paid

Solar Industries India Limited 4,662.72 2,148.40 367.45 236.26 00.27 672.00

Economic Explosives Ltd. 2,672.51 874.49 236.26 250.11 672.00Solar Mining Resources Ltd. 117.34 00.27Nigachem Nigeria Ltd. 3,132.87Solar Explochem Zambia Ltd. 642.03Patsan Pattlayici Maddeler Sanayi Ve Ticaret

537.44

4. Minority Interest

In the calculation of minority interest in one of the subsidiary named Nigachem Nigeria Limited, the distribution of profit earned during the year has been divided as per the agreement between the Holding Company (i.e. Solar Overseas Netherlands Cooperatie U.A.) and the Minority share holders.

5. Goodwill

Solar Overseas Neterlands BV has acquired 54% stake in each of Patsan Patlayici Mad. San. TIC. A.S. and ILCI Patlayici Mad. San. Ve TIC.A.S. during the year and has paid for Goodwill Rs. 1,114.48 Lacs. In the Balance Sheet Rs. 327.14 Lacs has been shown as Goodwill after adjusting the Capital reserve of Rs. 787.34 Lacs.

6. Joint Venture

Company has made investment during FY 2008-09 in two SPV companies along with SMS Infrastructure Pvt. Ltd. to enter into Joint Venture with CMDC for mining work and separate Joint venture companies is formed in which the stake of CMDC is 51%. The stake of Solar Industries India Limited in SPV Company is as follows.

Solar Bhatgaon Ext. Mines Pvt.Ltd. 49%SMS Bhatgaon Mines Extension Pvt.Ltd. 49%

7. Earnings per share

Basic earning per share has been reported as per Accounting Standards – 20 relating to “Earning per share” which have been computed by dividing net profit after tax by the weighted average No of shares outstanding for the period

31st March, 2011Net Profit for the year attributable to equity shareholders (Rs. in Lacs) 7,559.66Weighted Average No of Shares (in Lacs) 173.24Earning per Share (Rs.) 43.64


8. Contingent Liability

Amount in Rs. Lacs

01 In respect of counter guarantees given to Bank. 3,415.01

02 In respect of Excise matters in dispute / under Appeal 326.53

03 In respect of Sales Tax matter (Deferment) 2,076.18

04 In respect of Income Tax matters in dispute / under Appeal 18.24

05 In respect of Sales Tax matters in dispute / under Appeal 85.87

In earlier year the Company has supplied explosives to Coal India Ltd from 1st March, 2006 to 30th June, 2006 as per old rate contract rates on confirmation from Coal India Ltd that new rate contract will be issued effective from 1st March, 2006 Coal India Ltd has issued new rate contract w.e.f 29th July, 2006 without covering the period from 1st March, 2006 to 30th June, 2006. The Company has protested and now this is sub Juidice at Hon. Calcutta High Court on the ground that since no rate contract has been issued for 1st March, 2006 to 30th June, 2006 so rates of old rate contract shall be applied. During the year Hon. Calcutta High Court has given an order asking Bank Guarantee against such deductions and company has submitted the same which is included in contingent liability. The court has passed an order for release of payment against Bank Guarantee till the matter is settled.

9. The previous year’s figures have been regrouped / reclassified where necessary, to conform to the current year’s presentation.

10. Related party disclosures required as per AS-18 on `Related Parties disclosures’ issued by the Institute of Chartered Accountants of India, are below for the year ended on 31st March, 2011

Associates a) Solar Synthetics Private Limited

b) Mahakal Infrastructures Private Limited

c) Mahakal Project Private Limited

d) Nagpur Infrastructure Private Limited

e) Solar Bhatgaon Extension Mines Private Limited

f) SMS Bhatgaon Mines Extension Private Limited

g) Bhatgaon Extension Mines Private Limited

h) Bhatgaon Mines Private Limited

i) Sunbeam Explosives Limited

j) Sunrise Explosives Limited

k) Solar Initiating Systems Limited

l) Madanpur North Coal Fields Limited

m) Solar Processors Limited

n) Commercial Sales Corporation

o) Australian Explosive Technologies Group Pty Ltd

Key Management Personnel : a) Shri.S.N.Nuwal

b) Shri K.C.Nuwal

c) Shri Manish Nuwal

d) Shri K.S. Talesra

e) Shri R.D.Vakil

f) Shri Rahul Nuwal

g) Shri S. V. Kannan




Amount in Rs. Lacs

Particulars Associates Key Management Personnel

Sale of Goods 0.59Purchase of Materials 27.64Remuneration 563.80Loan Given Outstanding 7,428.90Loan Received Outstanding 1,445.72Interest Received 846.95Interest Paid 115.72Purchase of Land 273.24Balance Outstanding - -226.41

11. Segmental Information :

As regards the accounting standard 17 ‘Segment Reporting’ there are two business segment one is manufacturing of Explosives and other is trading of Ammonium Nitrate.

ParticularsSIIL Consolidated for the year ended

31st March, 2011 31st March, 20101. Segment Revenue a. Explosives 57,669.74 43,540.34 b. Trading 7,871.57 10,328.66 c. Others 2,446.67 2,177.17 Total 67,987.98 56,046.17 Less: Inter segment revenue 0.00 0.00 Revenue from Sales & other Income and exchange fluctuation gains 67,987.98 56,046.17 2. Segment Results Profit/(loss) (before tax and interest from each segment) a. Explosives 11,457.48 8,099.18 b. Trading (35.27) 21.63 Total 11,422.21 8,120.81 Less: (i) Interest paid (net of interest received) 1,275.86 1,335.98 (ii) Other un-allocable expenditure net off un-allocable income (2,658.87) (2,294.01) Total Profit Before Tax 12,805.22 9,078.84 3. Capital Employed a. Explosives 50,102.21 37,269.40 b. Trading 0.00 0.00 c. Others 0.00 0.00 Total 50,102.21 37,269.40


For Gandhi Rathi & Co., For And On Behalf Of The BoardChartered Accountants S.N.Nuwal Manish Nuwal




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SOLAR INDUSTRIES INDIA LIMITED

Registered Office: 11, Zade Layout, Bharat Nagar, Nagpur – 440 033

ATTENDANCE SLIP

Please complete this attendance slip and hand it over at the entrance of the Meeting Hall, Joint Shareholders may obtain attendance slip at the venue of the meeting.

Name and Address of the Member

Registered Folio Number

Client ID & DP IDNumber

Number of Shares held

I/We hereby record my/our presence at the 16th Annual General Meeting of the Company to be held at Wednesday, 10th day of August, 2011 at Hotel Tuli Imperial, Central Bazar, Ramdaspeth, Nagpur - 440 010 Maharashtra .

Signature of the Member or the Proxy Attending the Meeting

If Member, please sign here If Proxy, please sign here

Note: Members are requested to bring their copies of Notice and 16thAnnual Report to the Meeting as the same will not be circulated at the meeting

SOLAR INDUSTRIES INDIA LIMITED

Registered Office: 11, Zade Layout, Bharat Nagar, Nagpur – 440 033

PROXY FORM

Folio No. Client ID no. & DP ID no

I/We of being Member/Members of SOLAR INDUSTRIES INDIA LIMITED, hereby

appoint of or failing him/her of or failing him/her of as my/our Proxy to attend and vote for me/us behalf at the 16th Annual General Meeting of the Company to be held at Wednesday, 10th day of August, 2011 at Central Bazar, Ramdaspeth, Nagpur – 440 010 Maharashtra and at any adjournment thereof.

Signed this day of 2011

Signature of Shareholder(s)

Note: The Proxy form duly completed must be deposited at the Registered Office of the Company, not less than 48 hours before the time of holding the meeting. The Proxy need not be a member of the Company.

Affix One Rupee

Revenue Stamp here

& sign

SOLA

R IND

USTRIES IN

DIA

LIMITED



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REGD. OFFICE :11, ZADE LAYOUT, BHARAT NAGAR, NAGPUR - 440 033, (M.S.) INDIA.

PHONES : +91-712-2561000, 2560010 FAX : +91-712-2560202www.solarexplosives.com

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